Some student borrowers could see their debt completely forgiven next month.
Starting in February, people who took out less than $12,000 in loans and have been in repayment for 10 years will get their remaining loan balance "canceled immediately," President Joe Biden said in a Friday statement. The borrowers also must be enrolled in the Biden administration's new Saving on a Valuable Education repayment plan, also called the SAVE plan.
Friday's announcement is part of a push from the Biden administration to provide debt relief after the Supreme Court last year blocked its broad-based student loan forgiveness plan, which would have erased $20,000 in loans for about 40 million borrowers. Since then, the Education Department has been focusing on other paths to reduce the financial strain of student loans, such as the SAVE plan, which links repayments to income and, in some cases, can lower monthly payments to $0.
The new forgiveness plan "will particularly help community college borrowers, low-income borrowers and those struggling to repay their loans," Biden said in a statement. "And, it's part of our ongoing efforts to act as quickly as possible to give more borrowers breathing room so they can get out from under the burden of student loan debt, move on with their lives and pursue their dreams.
Here's what to know about the new plan.
Borrowers who originally took out $12,000 or less in student loans and who have been in repayment for 10 years, the Biden administration said.
Additionally, they must be enrolled in the new SAVE Plan. You can apply for the SAVE plan here.
Biden said the plan will begin forgiving student debt for people who meet the criteria "immediately" starting in February.
There are about 6.9 borrowers enrolled in the new IDR plan, and about 3.9 million of those have monthly payments of $0, according to the administraiton.
Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
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