Here’s Who Will Benefit From Biden’s Student Loan Relief

MMore than 275,000 borrowers enrolled in Saving on a Valuable Education (SAVE), Public Service Loan Forgiveness (PSLF), and others who benefit from previously announced income-based repayment plan adjustments will see student debt relief worth $7.4 billion applied to its accounts, the Biden administration announced Friday.

The decision comes on the heels of a separate announcement of the Administration’s broader student loan forgiveness program, which would replace the plan that the Supreme Court struck down last June. The scope of such debt relief would affect tens of millions of borrowers.

“Today’s announcement shows – once again – that the Biden-Harris administration is not giving up on its efforts to give American workers some breathing room,” US Education Secretary Miguel Cardona said in a statement. “As long as there are people with crushing student loan debt competing with basic needs like food and health care, we will remain tireless in our quest to bring relief to millions of people across the country.”

Borrowers will receive an email from the Department of Education starting Friday informing them of the changes to their accounts.

Here’s who this will help:

$3.6 billion for SAVE borrowers

Student debt relief was announced on Friday will eliminate $3.6 billion in debt for 206,800 borrowers. “This relief will go to borrowers enrolled in the SAVE Plan who had smaller loans for their post-secondary studies,” according to a Press release of the Department of Education. Borrowers who have made 10 years of payments and borrowed $12,000 or less will receive the assistance. For every additional $1,000 a borrower takes out in loans, they will need to wait an additional 12 months to see that amount forgiven.

The relief will be based on the borrower’s original principal balance, not what the borrower currently owes, according to the Department of Education.

$3.5 billion through income-based repayment plan adjustments

Another $3.5 billion will be erased from the accounts of borrowers who benefit from adjustments made to the income-based repayment plan. Borrowers enrolled in an income-driven repayment plan can see their debt forgiven after 20 or 25 years of payments, depending on the loan. This adjustment, which was initially implemented in 2022, reviews borrowers’ accounts and gives them credit for making partial and late payments.

$300 million for 4,600 Public Service Loan Forgiveness borrowers

More than 4,500 borrowers enrolled in the Public Service Loan Forgiveness plan will also receive forgiveness. The debt relief is part of a larger effort by the Biden administration to fulfill an earlier campaign promise of student loan forgiveness.

“Today we are helping 277,000 borrowers who have been making payments on their student loans for at least a decade,” said U.S. Under Secretary of Education James Kvaal in a press release. “They paid what they could and earned loan forgiveness for the loan balance.”