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Biden administration cancels $1.2 billion in student loans, a total of 7,540 Ohioans benefit immensely

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Cincinnati, Ohio – This week, over 7,500 people in Ohio saw their student loans disappear thanks to a new plan based on how much money they make.

On Wednesday, President Biden’s team said they are getting rid of $1.2 billion in loans for about 153,000 folks in the SAVE program. In Ohio, that means 7,540 people are getting $60 million in loans forgiven, the U.S. Education Department reports.

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“These aren’t just big picture numbers and impacts,” Education Secretary Miguel Cardona said as reported by the Cincinnati Enquirer. “We’re talking about lives changed. We’re talking about families that are going to be strengthened.”

This action follows another attempt by President Biden to cut down on student loan debt, which was blocked by the Supreme Court. That plan would have cleared $20,000 in debt for people who got Pell Grants and $10,000 for many others. Around 1.1 million people from Ohio had tried to get their loans forgiven under this effort, which some criticized as unfair and costly for taxpayers.

Here are the essentials on this new wave of loan forgiveness.

How do I qualify for student loan forgiveness?

People in Ohio can get their student loans canceled if they joined the SAVE program, originally borrowed $12,000 or less, and have paid on it for at least 10 years. Officials say this situation is typical for folks who might struggle to pay back their loans or who don’t make a lot of money.

The Education Department is on the lookout for those who fit the bill to get their loans erased “regularly.” They’re also planning to reach out to some who could be in the SAVE plan but haven’t joined yet, starting next week.

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Wondering if your student loan has been forgiven?

The government let people know this Wednesday if they were in the clear. If you got this message, there’s nothing more you need to do.

Loan companies are now working on erasing these debts and will tell you when yours is all sorted out. Education leaders say you’ll see the change in your account soon.

If you think you should have had your loan forgiven but didn’t get an email, it’s a good idea to talk to your loan company or check out studentaid.gov.

What is the SAVE plan?

Last year, President Biden’s team introduced the SAVE program, replacing the old Revised Pay As You Earn plan. Right now, about 7.5 million folks have signed up for SAVE, and 4.3 million of them don’t have to make any payments at all, the Education Department says.

SAVE calculates what you pay each month based on your discretionary income, which is what you earn minus 225% of the poverty line for how big your family is. Right now, you pay 10% of that income towards your loans each month, but that’s going to drop to 5% this summer.

If your loan interest every month is more than your payment, the government will cover the extra so it doesn’t get added to what you owe.

SAVE also has ways to get your loans completely forgiven. For every $1,000 you borrowed over $12,000, you can get forgiveness a year sooner. So, if you borrowed $13,000, your loans could be forgiven after 11 years.

Read also: CINCINNATI SCHOOLS WORK TO RECOVER LEARNING LOSSES POST-PANDEMIC

Everyone in SAVE can get their loans forgiven after 20 years if all their loans were for undergraduate study, and after 25 years if they have any loans from graduate school.

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