In a significant move aimed at easing the burden of student debt, U.S. President Joe Biden recently announced the accelerated cancellation of $1.2 billion in educational loan debt for over 150,000 borrowers under the Saving on a Valuable Education (SAVE) Plan. This marks the first wave of borrowers to benefit from relief under the modified repayment period, originally intended to begin in July.
Students who enrolled in the SAVE Plan and took out less than $12,000 in student loans with payments for the past 10 years or more will be forgiven. Currently enrolled borrowers will start receiving emails from the US Department of Education that they have been approved for forgiveness, and those who enroll in the SAVE Plan in the future and become eligible for forgiveness will have their loans discharged.
“We are once again sending a clear message to borrowers who had low balances: if you’ve been paying for a decade, you’ve done your part, and you deserve relief,” said U.S. Secretary of Education and Meriden, CT native Miguel Cardona in a press statement.
According to the White House, the Biden-Harris Administration has now approved a total of nearly $138 billion in student debt cancellation for almost 3.9 million borrowers through multiple executive actions. Under the SAVE plan, introduced last year, monthly loan payments are based on a borrower’s income and family size, not their current balance as was previously standard.
Information from the Education Data Initiative suggests Connecticut students hold more debt than the national average.
“Education is getting more expensive, and the prices of undergraduate and graduate studies differ,” said Vanessa Garcia, a 2022 CLAS graduate pursuing further education in library sciences. “There have been a lot of these [programs], but they should be available to more students.”
The announcement comes after other initiatives by President Biden to decrease student debt. In January, $5 billion was forgiven for nearly 74,000 borrowers who work in public service careers, with additional forgiveness programs for closed school discharges and disabled borrowers. Last summer, a proposal was inked that would have provided relief to millions of borrowers, but the Supreme Court ruled that only minor non-transformative relief programs could be enacted.
“It is difficult to get a job today, so to have the money to start paying back loans is difficult,” commented Anting Ma, a fourth-year computer science major. “I hope they can have more [loan forgiveness].”
President Biden promotes the SAVE Plan as a way to protect borrowers from larger-than-life interest and balances larger than what they originally took out. During the speech, President Biden stated there are 7.5 million borrowers currently enrolled in the SAVE Plan.
The announcement encourages borrowers who believe they meet the criteria to enroll in the SAVE Plan at studentaid.gov/save and to visit studentaid.gov/forgiveness for more information on forgiveness programs. For resources relevant to current UConn students and alumni, visit financialaid.uconn.edu or contact the Financial Aid Office in the One Stop Student Services Center, located in the Wilbur Cross Building on the main UConn campus in Storrs-Mansfield.