The highest total amounts of student debt cancellation went to borrowers in Texas, California and Florida, data from the U.S. Department of Education showed on Friday.
Earlier this week, the Biden administration announced that it was forgiving $1.2 billion in education loans for more than 150,000 borrowers, the latest step in the government’s policy of trying to give relief to millions of Americans who took out loans to pay for school.
Borrowers in Texas received nearly $117 million, followed by California which got about $115 while Florida received $105 million.
On Wednesday, the Education Department (ED) announced that it will forgive the loans under the Saving on a Valuable Education (SAVE) plan, which was conceived to help borrowers achieve debt forgiveness quicker. Those with loans of less than $12,000 and have been making payments to service their debt and are enrolled on the SAVE plan qualify for this latest cancellation.
“The state-by-state SAVE Plan debt forgiveness numbers we’re announcing today not only show that President Biden’s leadership is making a real impact on people’s lives in every state – they demonstrate that we won’t ever stop fighting to make higher education more affordable and accessible for more Americans,” U.S. Secretary of Education Miguel Cardona said in a statement. “This is that commitment in action. This is the real deal.”
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Loan servicers began processing the cancellation on Friday, according to the government, and noted that those who qualified for forgiveness received emails from Biden notifying them of the change.
The Biden administration has canceled a total of $138 billion of student debt for nearly 4 million Americans.
The policy has been a key plan of the president’s agenda since he came into office three years ago. An initial attempt to cancel up to $20,000 of student loans was struck down by the Supreme Court last year. As an alternative, the administration introduced the SAVE plan to offer a path for borrowers to have their debt erased. The program has 7.5 million subscribers, the education department said.
“The SAVE Plan protects borrowers from runaway interest and balances larger than what they originally took out,” the education department said in a statement on Friday. “The Department will implement the remaining full benefits of the SAVE Plan in July 2024, which will further reduce monthly payments from 10 percent of a borrower’s discretionary income to 5 percent.”
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About 44 million Americans have student debt in the U.S. and they owe an average of $38,000 in federal loans, according to the Education Data Initiative. As of November, the total owed in student loans grew by $30 billion to $1.6 trillion, data from the Federal Reserve Bank of New York shows.
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