US student loans: Joe Biden cancels $1.2 billion debt for 150,000 borrowers

Los Angeles: President Joe Biden announced the cancellation of an additional $1.2 billion in student loan debt for about 153,000 borrowers Wednesday, his latest effort at student debt relief after the Supreme Court blocked a more sprawling plan last year.

Biden has now canceled $138 billion of student debt for almost 3.9 million borrowers through about two dozen executive actions, according to the White House.

Wednesday's action comes as some Democrats have pleaded for Biden to highlight his success in relieving debt to galvanize crucial constituencies, including young voters and Black borrowers who disproportionately shoulder student loan debt.

Since the Supreme Court blocked Biden's ambitious plan to cancel $400 billion in student debt for about 43 million borrowers, the White House has tapped into various smaller programs to forgive debt for specific groups.

The most recent round of cancellation benefits those enrolled in the income-driven repayment plan known as SAVE, which opened for enrollment in August. It reduces monthly payments and shortens the life of loans for millions of borrowers.

The administration is making efforts to ensure Biden receives credit for the cancellation, with the affected borrowers set to receive an email from Biden on Wednesday informing them that their debt will be erased this week.

"This shortened time to forgiveness will particularly help community college and other borrowers with smaller loans and put many on track to being free of student debt faster than ever before," the administration said in a statement.

Borrowers who opted in to the SAVE plan who originally borrowed up to $12,000 and who made at least 10 years of qualifying monthly payments will have their debt wiped out entirely. As part of this effort, the administration accelerated its plans to shorten loan terms; the changes had been set to take effect in July.

The announcement Wednesday morning comes at an opportune time for Biden as he works to energize voters during a fundraising trip in California.