Biden Forgives $1.2B In Student Debt For 150K Borrowers Hit By Specific Issues

The Biden administration has announced the forgiveness of $1.2 billion in student loans, relieving more than 150,000 borrowers.

What Happened: The forgiveness is part of a program introduced by President Joe Biden‘s administration in January, aimed at easing the burden on Americans who have been repaying for at least ten years. This initiative, called the Saving on a Valuable Education (SAVE) plan, will clear the debts of those who borrowed less than $12,000 for their higher education, reported Bloomberg on Wednesday.

The total amount of relief approved by the Biden administration now stands at nearly $138 billion, benefiting 3.9 million borrowers. This number may increase as more individuals become eligible for forgiveness under the SAVE program, which currently has 6.9 million participants.

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Despite these efforts, they fall short of Biden’s initial proposal for broader student loan cancellation, which the U.S. Supreme Court rejected last year.

Why It Matters: The recent decision to forgive student loans is part of a series of actions taken by the Biden administration to address the issue of student debt. In 2023, the administration agreed to forgive $39 billion in student debt by updating a technical requirement under an existing program. This decision was seen as an alternative to a $400 billion student loan forgiveness plan that was struck down by the Supreme Court.

Despite the court’s ruling, the administration flagged $127 billion of federal student loans for potential cancellation. This move was criticized by some, including Kevin O’Leary, chairman of O’Leary Ventures and a well-known figure from "Shark Tank," who slammed the decision as "un-American."

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