Biden-Harris Forgive $1.2B In Student Loans Under SAVE Plan

Borrowers benefiting from the forgiveness will receive an email from President Biden.

The Biden-Harris Administration announced the cancellation of $1.2 billion in student loans for 153,000 borrowers who are currently enrolled in the Saving on a Valuable Education (SAVE) repayment plan. This announcement marks nearly $138 billion in student debt cancellation for almost 3.9 million borrowers through more than two dozen executive actions by the Biden-Harris administration, according to senior White House officials.

“With today’s announcement, we are once again sending a clear message to borrowers who had low balances: if you’ve been paying for a decade, you’ve done your part, and you deserve relief,” said U.S. Secretary of Education Miguel Cardona. “Under President Biden’s leadership, our Administration has now approved loan forgiveness for nearly 3.9 million borrowers, and our historic fight to cancel student debt isn’t over yet.”

Borrowers benefiting from the forgiveness will receive an email from President Biden, as seen here. To ensure the email is not from a third party or a potential scam, senior administration officials encourage borrowers to check their loan status at studentaid.gov/save. If anyone suspects they have received fraudulent information, they should report it to the Federal Trade Commission.

The SAVE Plan, introduced in August 2023, is a voluntary, income-driven repayment plan that bases monthly student loan payments on the borrower’s income and family size, not their loan balance. The plan ensures that balances cannot grow because of unpaid interest for borrowers who are making their monthly payments.

Also, starting in July, undergraduate loan payments will be cut in half, capping a borrower’s loan payment at 5% of their discretionary income. To date, 7.5 million borrowers are enrolled in the SAVE Plan, and 4.3 million borrowers have a $0 monthly payment.

Black women and HBCU alumni hit hardest by debt

Black borrowers are hardest hit by debt, particularly those attending historically Black colleges and universities (HBCUs). A UNCF report notes that HBCU students — many of whom are first generation and low-income — must borrow at higher rates, and consequently graduate with substantially higher debt than non-HBCUs peers.

Senior administration officials said that making student loan programs more fair is an important step to addressing inequities and opportunities by race. The SAVE Plan is, for most borrowers, the most affordable way to repay student loans, according to White House officials, anticipating it will be a valuable tool for many Black borrowers and HBCU alumni.

Black women also carry an enormous debt load: an estimated $35 billion as of 2020, according to data estimates from The Prosp(a)rity Project (TPP). Briana Franklin, co-founder, president and CEO of TPP, works daily to remove debt constraint via 35*2Free, an eight-month initiative offering eligible Black women financial coaching and career development to put them on a track to surpass their debt challenges and begin creating generational wealth. TPP also helps Black women with financial awards to pay down their student loan debt.

“That debt constraint is very squarely to blame for a lot of the perils that we’re seeing,” Franklin told BLACK ENTERPRISE, noting homelessness, fertility and family planning struggles, and challenges attaining higher-paying jobs due to the long lead time in the hiring process.

Franklin is among the Black women with tremendous debt loads. She graduated from an Ivy League college in 2017, armed with a Bachelor’s degree in English literature and $100,000 in student loan debt. Six years later, she’s actively worked — sometimes two or more jobs — to pay down her debt, which now stands at $85,000. But her struggle fueled a passion to help other women through TPP, which has helped 20 Black women, called “Prosparettes,” with debt averages of $90,000 by offering collective debt relief awards of nearly $165,000.

“The endgame is just helping them catch back up, showing compassion and some sympathy to their situation in having lived it ourselves,” Franklin said, “and making sure that they’re better prepared to achieve their career and money goals.”