WASHINGTON — President Joe Biden announced Friday that some federal student loan borrowers will have their loans cancelled under the Department of Education’s new repayment plan.

Starting next month, people who took out under $12,000 in federal student loans and have been repaying those loans for 10 years will get their remaining student loan balance cancelled in the Saving on a Valuable Education Plan, known as SAVE.

“This action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans,” Biden said in a statement.

“And, it’s part of our ongoing efforts to act as quickly as possible to give more borrowers breathing room so they can get out from under the burden of student loan debt, move on with their lives and pursue their dreams.”

This initiative builds on the Biden administration’s effort to cancel federal student loan debt following last year’s U.S. Supreme Court decision that struck down the White House’s plan for a one-time cancellation of up to $10,000 for federal borrowers. Student loan borrowers who had received Pell Grants — federal aid to help low-income students pay for higher education — could have qualified for an additional $10,000 in forgiveness.

, the White House announced its SAVE plan, along with a one-year off-ramp program that would not report borrowers to creditors if they failed to make loan payments once repayment started back up in October.

“And, in the wake of the Supreme Court’s decision on our student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible,” Biden said. “I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.”

So far, 6.9 million borrowers have enrolled in SAVE, and of those borrowers, 3.9 million have a $0 monthly payment.

Under the new plan, SAVE calculates payments based on a borrower’s income and family size and forgives balances after a set number of years. The Department of Education has estimated that most borrowers will save about $1,000 per year under the new plan.

Borrowers who are in the former payment plan — known as the Revised Pay as You Earn plan — will automatically be enrolled in the SAVE program.

The states with the highest number of borrowers enrolled in the program include Texas, with 591,700, California with 597,300, Florida with 475,800, New York with 374,300 and Pennsylvania with 289,800.

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Biden, who made student debt relief part of his presidential campaign, also extended a on student loan payments through the end of the year.

“Education is a ticket to a better life, but over time, that ticket has become too expensive,” the president said at the White House. “The burden is so heavy that even if you graduate, you may not have access to the middle class life that the college degree once provided.”  

The decision could lift some of the financial burden off teachers who took out loans to fund their education. A from the National Education Association showed that 45% of educators were student loan borrowers and over half of those still have a balance, averaging almost $59,000.

“Nobody goes into teaching for the money, but you have to survive,” said Joshua Starr, managing partner of the International Center for Leadership in Education, affiliated with education publisher Houghton Mifflin-Harcourt. Previously, he served as CEO of PDK International, a membership organization for educators. 

Making college more affordable, he said, “is one part of a larger fabric that we have to consider when we want to promote the idea that teaching is a sustainable job.”

The president gave himself an Aug. 31 deadline to announce his decision — the date that the pause on federal student loan payments was set to expire. His announcement from Republicans, who have said the policy gives borrowers will make inflation worse and ignores the law. Earlier this month, the GOP introduced that would limit loan forgiveness. But Democrats largely applauded the move, with Sen. Patty Murray of Washington, chair of the education committee, calling it a “milestone moment.”

On Tuesday, the U.S. Department of Education provided an update on the $32 billion in student debt relief previously approved since the Democrats took office. That includes $10 billion for over 175,000 borrowers in the Public Service Loan Forgiveness program since last October. 

Under former Secretary Betsy DeVos, the vast majority in the program were even though they took education and other service sector jobs that they believed would qualify. To be eligible for forgiveness, borrowers in the program had to submit a waiver, which expires at the end of October. Democrats Education Secretary Miguel Cardona to extend the waiver until at least July 1 of next year. 

‘Struggling to rebound’

As the cost of a has increased, the NEA report showed that educators 35 and under were more likely to take out student loans, compared to older educators. Student debt is also more common among Black than white educators — 56% compared with 44%.

Some advocates said the president’s action doesn’t go far enough. 

“Canceling $10,000 in student loan debt merely puts a Band-Aid on the real problem of reforming the system that has landed us in this mess — and within years we will be right back at the same point,” the National Parents Union said in a statement.

Kim Cook, CEO of the nonprofit National College Attainment Network, noted that Pell grants for low-income students — at an average of about $4,500 — don’t cover even half the annual cost of higher education. 

“Fast-rising and unmanageable levels of student debt are the result of a broken system for financing higher education in which many parents and students are forced to take out loans they cannot reasonably be expected to repay,” she said in a statement. The organization advocates for doubling Pell grant awards.

Experts say loan forgiveness would especially benefit early educators, who make far less than those in the K-12 system and often kept their programs open when schools were closed.  

“The pandemic shined a light on the low pay for child care providers who are leaving the industry in droves, causing a shortage of child care options for families,” said Alexandra Patterson, director of policy and strategy for Home Grown, a nonprofit advocating for home-based providers. Loan forgiveness, she said, would benefit “a workforce that is severely underpaid and is still struggling to rebound from the impact of the COVID-19 pandemic while wrestling with the challenges of inflation.”

Adrienne Briggs, who runs Lil’ Bits Family Child Care Home in Philadelphia, earned her master’s in early-childhood education in 2013, but she still carries over $50,000 in debt. She didn’t qualify for relief though the revamped Public School Loan Forgiveness program because she owns her own business.

Through an income-based repayment program, her $650 monthly payments have dropped to $150, but that just stretched out the debt over a longer period. The administration is also relaxing those repayment terms, lowering the percentage borrowers have to pay from 10% to 5% of their income. And it will forgive original loan balances of $12,000 after 10 years. 

“Even having my master’s did not change my position,” said Briggs, who serves families who receive child care subsidies and wouldn’t be able to pay higher rates if she raised them. “All I ended up getting was a bill that has been haunting me all this time.”