Congressman Cleaver Explains Prez Biden Student Loan Forgiveness

Agree or not with the policy, it's very likely that TKC readers might know someone that could use the help advocated for in this newsletter update from Kansas City's top ranking statesman.

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EC From DC: President Biden's SAVE Plan is Providing Student Debt Relief to Millions, See if You're Eligible Today

Hello Neighbor,

I write you today to share the wonderful news that President Biden recently canceled $5 billion in student loan debt for over 74,000 hardworking Americans--and to let you know how you may be able to receive long overdue relief by applying for a SAVE Plan today.
 
Of the 74,000+ Americans impacted by his recent announcement, 44,000 are teachers, firefighters, nurses, and other public workers with over ten years in public service. The remaining 30,000 borrowers spent the past 20 years in income-driven loan repayment programs but never received the relief they were entitled to. While a Supreme Court decision blocked President Biden's original student loan forgiveness plan that would have canceled up to $20,000 in student debt for students making less than $125,000 a year, this latest cancellation for 74,000 Americans brings the total number of Americans under the Biden Administration with canceled debt to over 3.7 million, according to the White House. That's progress.
 
However, over 40 million Americans still have federal student loans, including nearly 800,000 Missourians. To provide relief to these hardworking families, the Biden Administration is encouraging Americans to see if they are eligible for a SAVE Plan. This historic program ensures that individuals who originally borrowed $12,000 or less and have been in repayment for at least 10 years will have their student loans forgiven automatically.

To provide long overdue relief, the SAVE Plan will:

- Reduce payments on undergraduate loans: Borrowers with undergraduate loans will have their payments reduced from 10% to 5% of their discretionary income. Those who have undergraduate and graduate loans will pay a weighted average between 5% and 10% of their income based upon the original principal balances of their loans.

- Bring many borrowers' loan payments to $0 per month: A single borrower who makes about $15 an hour will not have to make any monthly payments. Borrowers earning more than $15 per hour could save around $1,000 per year on their payments compared to other income driven repayment (IDR) plans.

- Stop out of control interest: The Department of Education will stop charging monthly interest not covered by the borrower's payment if they enroll in the SAVE Plan. Borrowers who keep up with their monthly payments will no longer see their loans grow due to unpaid interest. The Department estimates that 70% of borrowers who were on an IDR plan before the payment pause would benefit from this change.

- Provide early forgiveness for low-balance borrowers: Borrowers whose original principal loan balance were $12,000 or less will have their loans forgiven after 120 payments (about 10 years in repayment), rather than typically waiting 20-25 years before receiving loan forgiveness under the previous IDR plans.

-Auto-enroll individuals already participating in the REPAYE Plan: Borrowers who are already signed up for the IDR Revised Pay-As-You-Earn (REPAYE) Plan will be automatically enrolled in the SAVE Plan.

To learn more and apply for the SAVE Plan, please visit studentaid.gov/SAVE.
 
The Biden Administration, Congressional Democrats, and I remain firm in our commitment to promote policies that lower costs and provide relief to the American people. Whether it was lowering prescription drug and energy costs with the Inflation Reduction Act or providing financial relief by strengthening the Child Tax Credit in the American Rescue Plan, we're focused on providing families with a little extra breathing room.
 
If you are ever in need of assistance, please don't hesitate to reach out to my office for support. To stay informed on events happening in Washington, D.C. and Kansas City, visit my website here to sign up for my electronic newsletter. Please feel free to contact me in the future regarding this or any other issue important to you.

Sincerely,
Emanuel Cleaver, II
Member of Congress

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