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Biden cancels student debt 6 months early for some borrowers

By Jake Beardslee · January 12, 2024

In brief…

  • resident Biden announced accelerated student loan forgiveness under the SAVE program
  • Starting in February, borrowers who owe less than $12k and made 10 years of payments will get remaining debt canceled
  • Move comes 6 months earlier than originally planned
  • Expected to help community college borrowers and low-income borrowers most
  • Over 6 million borrowers enrolled in SAVE program eligible
President Biden will accelerate student loan forgiveness timeline to start canceling debt in February for certain borrowers under the SAVE program.  The White House/Wikimedia

President Joe Biden announced on Friday that the Education Department will begin canceling federal student loan debt next month for borrowers enrolled in an income-driven repayment plan who originally borrowed $12,000 or less.

Biden said in a statement that the loan forgiveness will start in February, “nearly six months ahead of schedule,” for those who have made payments for at least 10 years under the new Student Aid for Vocational and Educational (SAVE) program, according to NBC News.

While the plan was originally expected to take effect in July, Biden said accelerating the timeline will “give more borrowers breathing room” and allow them to move on from their student debt.

According to the administration, the accelerated forgiveness will “particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans,” The Associated Press reported.

An estimated 6.9 million borrowers are currently enrolled in the SAVE program, which limits monthly payments to 5% of discretionary income and offers loan cancellation after 10 years of payments.

The announcement comes after the Supreme Court rejected Biden’s plan for widespread student loan forgiveness of up to $20,000 for tens of millions of Americans.