‘You deserve relief’: President Biden wiped out another $1.2 billion in student debt for borrowers on the SAVE plan — House Republicans called move 'unlawful'

To qualify, borrowers must have made at least 10 years of repayments and be enrolled onto the government’s new Saving on a Valuable Education (SAVE) Plan.

“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.

According to CNBC, more than half of House Republicans and 40 GOP senators (including Minority Leader Mitch McConnell) actively oppose the Biden administration's debt relief policy.

In early February, they filed briefs with the with the U.S. Supreme Court, arguing the forgiveness plan should be ruled "unlawful."

McConnell criticized the move on X, formerly known as Twitter, calling it a “slap in the face” to those who had already paid off their loans and made considerable professional and personal sacrifices to avoid student debt. “President Biden’s inflation is crushing working families, and his answer is to give away even more government money to elites with higher salaries,” the GOP leader said in his statement.

Here’s how this latest wave of student debt relief will work.

SAVE-ing struggling borrowers

The SAVE plan aims to help borrowers who are more likely to struggle with repaying their loans.

According to the Department of Education (DoE), the majority of federal student loan borrowers in default originally borrowed $12,000 or less, hence that being the eligibility criteria for this wave of SAVE plan relief.

For every $1,000 borrowed over the $12,000 threshold, those enrolled in SAVE will get relief after an additional year of payments. For example, if you borrowed a $14,000 federal loan, you can get your student debt wiped out after making payments for 12 years.

The DoE estimates this fresh batch of relief will help nearly 153,000 borrowers with almost immediate effect. Others, who are eligible for early relief, but not yet enrolled in the SAVE plan, will receive a reminder from the DoE to sign up as soon as possible.