Biden has announced a plan to erase students for loan debts under $12K

Biden has announced a plan to erase students for loan debts under $12K, per FOX.

President Biden announced on Friday that next month, the remaining debts of certain student loan borrowers enrolled in the Saving on Valuable Education (SAVE) plan will be forgiven.

The plan, criticized by Republicans who argue that taxpayers will bear the cost, applies to SAVE participants who borrowed less than $12,000 and have been in repayment for a decade, according to Biden's statement. SAVE is an income-driven repayment (IDR) plan that calculates payments based on a borrower’s income and family size rather than their loan balance.

While the administration did not specify the number of affected individuals, it emphasized that the move would particularly benefit community college borrowers, low-income borrowers, and those struggling with loan repayment.

Approximately 3.6 million student loan borrowers have already experienced reductions to $0 monthly payments under the plan, originally announced last year after the Supreme Court rejected the White House’s plan to cancel $430 billion in student loan debt.

Initially slated for implementation in July, the latest phase of the SAVE plan has been accelerated to February by Biden. Currently, 6.9 million borrowers are enrolled in the plan, he stated.

"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," said Biden. "And, in the wake of the Supreme Court’s decision on our student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible, as quickly as possible."

According to the Penn Wharton budget model, SAVE is projected to have a net cost of $475 billion over the 10-year budget window.

Democrats, including Sen. Majority Leader Chuck Schumer, D-N.Y., praised Biden’s announcement. Schumer wrote on social media, "This is good news for borrowers and for students wondering if college is within their reach. This is an important step in our movement to cancel meaningful student debt. I applaud the Biden admin for taking action."