The Biden administration is expanding the SAVE plan, a federal loan program with generous terms, to wipe out billions of dollars in student debt. More borrowers are now eligible for loan cancellation after 10 years of payments, a decade sooner than before.
The SAVE plan is a federal loan program with generous terms, allowing the Biden administration to wipe out billions of dollars in debt.. More people are becoming eligible for student loan cancellation as they hit 10 years of payments, a new finish line for some loans that’s a decade sooner than what borrowers faced in the past.
Congress created the first income-driven repayment option in the 1990s for people struggling to afford payments on standard plans. It capped monthly payments to a percentage of their incomes and canceled any unpaid debt after 25 years. Similar plans were added later, offering cancellation in as little as 20 years.
In a call with reporters, Education Secretary Miguel Cardona said the plan provides relief and prevents borrowers from falling behind on their loans. The Biden administration says it's designed to help those who need it most. Counterintuitively, those with smaller student loan balances tend to struggle more. It’s driven by millions of Americans who take out student loans but don’t finish degrees, leaving them with the downside of debt without the upside of a higher income.
The lawsuits don't directly address the question, and the attorneys general didn't immediately respond to an Associated Press request.
Biden Administration Student Loan Cancellation SAVE Plan Federal Loan Program Debt Higher Education Repayment Plan
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