In Florida, 12,790 borrowers were approved for student loan forgiveness this week.
On Feb. 21, the federal Education Department announced a new wave of student loan forgiveness for certain borrowers enrolled in Biden’s SAVE plan, an income-driven repayment option that was introduced last summer.
Borrowers must owe an initial amount of $12,000 or less, and have made student loan payments for at least 10 years, according to an Education Department press release.
During a press call earlier this week, U.S. Secretary of Education Miguel Cardona said the debt relief is designed to assist low- and middle-income borrowers, many of whom took out student loans to attend community college.
“The bottom line is this: We're providing real, immediate breathing room from an unacceptable reality where student loan payments compete with basic needs like putting food on the table and accessing healthcare," he said.
The loan forgiveness plan is expected to strike out $1.2 billion in student debt for nearly 153,000 borrowers nationally, according to the press release.
In Florida, the forgiveness plan is expected to strike out $105 million in debt for eligible borrowers.
Wednesday’s announcement, which was originally slated for July 2024, makes good on a promise the Biden Administration made in January to provide early debt relief to the first batch of SAVE enrollees.
READ MORE: Why the Biden administration is forgiving small student loans - and how to apply
The SAVE plan, which has nearly half a million enrollees in Florida alone, offers lower monthly payments and promises loan forgiveness to all borrowers who make payments for 20 to 25 years, according to a White House issue brief.
Thousands of borrowers in Florida received an email from President Biden this week notifying them about their eligibility for the early loan forgiveness.
“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,” according to an excerpt of a drafted email shared by the Education Department.
While the latest wave of loan forgiveness may offer meaningful relief to a fraction of borrowers in Florida, USF economics instructor Michael Snipes said he is doubtful it will have broader economic impacts.
“From a macro perspective, I really don’t think it’s going to have too much of an impact, and especially if it’s going to be limited in so many ways – it’s just going to have a limited impact,” he said. “From an individual standpoint, $12,000 … is nothing to sneeze at.”
For a borrower who has been making consistent payments for a decade, but has yet to make a dent in the principal amount owed due to compound interest, loan forgiveness will make a huge difference.
Snipes said that “one-time transfer of income” that was expected to go towards debt can now make climbing household expenses, like rent and grocery costs, easier to afford.
Borrowers who believe they meet the criteria, but who are not enrolled in the SAVE plan, are encouraged to immediately sign up at StudentAid.gov/save
Gabriella Paul covers the stories of people living paycheck to paycheck in the greater Tampa Bay region for WUSF. She's also a Report for America corps member. Here’s how you can share your story with her.
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