Student Debt Canceled For These New York Residents

The President of the United States announced the approval of $1.2 billion in student loan debt cancellation. To compare how much of the debt is being forgiven, the U.S. student loan debt totals $1.74 trillion as of September 2023, according to NerdWallet.  

When it is looked at like that, the President is really only forgiving about .07% of the population’s student debt, which is more like a car scratch rather than a dent, if you ask me. 

However, the Biden-Harris Administration has approved a total of nearly $138 billion in student debt cancellation for almost 3.9 million borrowers, which covers 8% of the U.S. population with student debt. 

The students who are receiving this relief are the first to benefit from a SAVE plan policy that provides debt forgiveness to borrowers who have:

• Been in repayment after as little as 10 years, and
• Took out $12,000 or less in student loans.

This plan was supposed to originally go into effect in July, but according to the White House, the SAVE plan will be providing relief to borrowers nearly six months ahead of schedule.  

If you borrowed more than $12,000, then you will receive relief after an additional year of payments per every $1,000 additional to the base value of $12k. That means that if you took out $14,000, as pointed out by the White House as an example, to earn an associate’s degree in biotechnology would receive full relief this week if they have been paying off the loan for 12 years.

How did we get 12? The base value is $12,000 for the forgiveness plan, and if you took out $14,000, that means you are $2,000 over the base value. Since you receive full debt relief once you have been paying for an additional year for every $1,000, that means $2,000 over the base value of $12k would equate to 2 additional years of repayment. Add 2 + 10 = 12 years of repayment in order to receive full debt relief. 

If you are not already enrolled in the SAVE program, the Department of Education plans to reach out directly to borrowers who are eligible for early relief. They will help you enroll as soon as possible. 

To see the full press release from the White House, click here.