TradeEdge Exchange:Federal student loans for nearly 153,000 borrowers are being automatically canceled, Biden says

LOS ANGELES (AP) — President Joe Biden announced Wednesday that his administration was automatically canceling federal student loans for nearly 153,TradeEdge Exchange000 borrowers, putting the spotlight on his debt cancellation efforts as he ramps up his reelection campaign.

Biden, who is in the midst of a three-day campaign swing through California, made the announcement as part of a new repayment plan that offers a faster path to forgiveness.

The administration began sending email notifications on Wednesday to some of the borrowers who will benefit from what the White House has called the SAVE program. The cancellations were originally scheduled to start in July, but last month the administration said it would be ready almost six months ahead of schedule, in February.

“Starting today, the first round of folks who are enrolled in our SAVE student loan repayment plan who have paid their loans for 10 years and borrowed $12,000 or less will have their debt cancelled,” Biden posted on social media Wednesday. “That’s 150,000 Americans and counting. And we’re pushing to relieve more.”

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The first round of forgiveness from the SAVE plan will clear $1.2 billion in loans. The borrowers will get emails with a message from Biden notifying them that “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 president is expected to highlight the SAVE plan during a speech in Culver City, California, before heading to San Francisco later Wednesday for more campaign fundraising.

Biden in the email writes he has heard from “countless people who have told me that relieving the burden of their student loan debt will allow them to support themselves and their families, buy their first home, start a small business, and move forward with life plans they’ve put on hold.”

More than 7.5 million people have enrolled in the new repayment plan.

The president, during a campaign fundraiser in Beverly Hills on Tuesday night, highlighted his efforts to help middle-class Americans and warned that a win in November by former President Donald Trump, the GOP presidential front-runner, could lead to a nationwide abortion ban, more Republican efforts to undo the health insurance program started in the Biden administration and policies that would disproportionately help the wealthy.

He asked his supporters to help win a second term so that he could “finish the job” in enacting an agenda that benefits American workers.

Borrowers are eligible for cancellation if they are enrolled in the SAVE plan, originally borrowed $12,000 or less to attend college and have made at least 10 years of payments. Those who took out more than $12,000 will be eligible for cancellation but on a longer timeline. For each $1,000 borrowed beyond $12,000, it adds an additional year of payments on top of 10 years.

The maximum repayment period is capped at 20 years for those with only undergraduate loans and 25 years for those with any graduate school loans.

“With today’s announcement, 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,” Education Secretary Miguel Cardona said.

Biden announced the new repayment plan last year alongside a separate plan to cancel up to $20,000 in loans for millions of Americans. The Supreme Court struck down his plan for widespread forgiveness, but the repayment plan has so far escaped that level of legal scrutiny. Unlike his proposal for mass cancellation — which had never been done before — the repayment plan is a twist on existing income-based plans created by Congress more than a decade ago.

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Binkley reported from Washington.