Biden cancels $1.2 billion in student loan debt for 150,000 borrowers

The Biden administration will begin automatically relieving student debt for another 153,000 people on Wednesday, bringing the total number of Americans approved for debt relief to nearly 3.9 million.

President Joe Biden will tout the new debt relief in a speech from Los Angeles, and thousands of people will receive an email from the president informing them that they now qualify for relief.

"Congratulations — all or a portion of your federal student loans will be forgiven because you qualify for early loan forgiveness under my Administration's SAVE Plan," the email from the president will read.

The people receiving debt relief beginning Wednesday are those who enrolled in the newest student loan payment plan, called the SAVE Plan, which the Department of Education calls the most affordable plan for the majority of borrowers.

Anyone enrolled in the SAVE Plan who took out less than $12,000 in initial loans and has been paying them down for the past 10 years or more will have them forgiven.

"This plan reflects our unapologetic commitment to deliver as much relief as possible to as many borrowers as possible, as quickly as possible," Education Secretary Miguel Cardona said on a call with reporters on Tuesday.

Roughly 7.5 million Americans are enrolled in the SAVE Plan, which just launched this past summer.

The 153,000 who are getting automatic relief starting Wednesday are the first tranche of borrowers to benefit from this aspect of the plan. Moving forward, anyone else who enrolls in the plan and meets this criteria will also get debt relief.

As of Wednesday, there are many Americans who could actually qualify for this debt relief but aren’t enrolled in the SAVE Plan, something the Biden administration says it's working to improve outreach on as an estimated 27 million Americans are currently in repayment for student loans.

Who are the other 3.7 million people who have been approved for debt relief under Biden?

At least 513,000 borrowers have, so far, been approved for debt relief after filing for a total and permanent disability, while 1.3 million borrowers have been approved for debt relief because it has been deemed their college defrauded them.

Some of the most well-known debt relief programs under Biden, however, have been the fixes to the program for people working in public service and to income-driven repayment plans.

The Biden administration has now processed relief for more than 793,000 borrowers through fixes to the Public Service Loan Forgiveness program (PSLF), which allows for debt relief for people in jobs like firefighting, nursing and teaching after 10 years of continuous payment.

The other large tranche of borrowers to receive relief are those enrolled in income-driven repayment plans, which allow people to pay a certain percentage of their income towards their loans for 20 or 25 years before their debts are forgiven.

Around 930,500 borrowers have been identified as paying for their allotted time, but not getting relief. They have now had their debts approved for relief.

The PSLF and income-driven repayment fixes are considered minor fixes to an already-broken system in the student loan apparatus that the Biden administration has now addressed.

They are not debt relief to the tune of $10,000 to 20,000 in blanket forgiveness for anyone who makes below a certain income, as Biden hoped to do last year before the Supreme Court determined his plan was unlawful.

Still, the Biden administration continues to push efforts on debt relief while on the campaign trail, something Biden himself will do on Wednesday in Los Angeles.

“These actions have allowed nearly 4 million people to afford other expenses in their lives -- buy homes, start businesses, pursue dreams that they had to put on hold because of their student loans,” Natalie Quillian, White House Deputy Chief of Staff, said on a call with reporters Tuesday.

“Now, because of the president and the Biden Harris administration, millions of borrowers and their families are no longer weighed down by the burden of student debt,” she said.