BOSTON â Nearly 2,500 Massachusetts borrowers will see millions of dollars in college debt wiped out under President Joe Bidenâs new $1.2 billion loan forgiveness cancellation program.
Under the program, borrowers with less than $12,000 in student loans and who have been making payments for at least 10 years would get their remaining loan balance erased if they enroll in the federal governmentâs Saving on a Valuable Education repayment plan.
In Massachusetts, the plan will cancel $19.5 million in college loan debt held by 2,490 borrowers, according to data provided by the Biden administration.
For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments, according to the Biden administration.
All borrowers who have signed up for the SAVE program will receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school.
The Biden administration said the forgiveness is based on the principal balance of federal loans borrowed as a student to attend school, ânot what a borrower currently owes or the amount of an individual loan.â
Education Secretary Miguel Cardona said the Biden administrationâs loan forgiveness programs are âmaking a real impact on peopleâs lives in every state.â
âWhen we talk about fixing a broken student loan system, this is what weâre talking about,â he said in a statement. âThis is that commitment in action. This is the real deal.â
Overall, Bidenâs latest loan forgiveness program will cancel up to $1.2 billion nationwide. In New Hampshire, nearly 500 borrowers will see at least $3.6 million in college debt wiped out.
To date, $136.6 billion in federal college loans have been forgiven for more than 3.7 million Americans, according to the Biden administration.
Last June, the U.S. Supreme Court struck down a Biden plan that had called for canceling up to $10,000 in debt for those earning less than $125,000 per year and up to $20,000 for those who received federal Pell Grants.
In a 6-3 decision, the high court ruled that the administration overstepped its authority in attempting to cancel or reduce student loan debt, effectively ending the $430 billion plan that would have canceled up to $20,000 in federal student loans for 43 million people.
The ruling stemmed from a lawsuit filed by six Republican-led states â Nebraska, Missouri, Arkansas, Iowa, Kansas and South Carolina â which argued the program was government overreach.
Conservative groups have filed legal challenges to Bidenâs other loan forgiveness plans, but so far they havenât been successful.
Recent studies suggest that decades of declining financial aid support is putting many college students in deep debt.
A report issued earlier this year by the Hildreth Institute found that nine out of 10 Massachusetts community college students have an unmet financial need, averaging about $8,557 per year.
The report noted that tuition and fees at Massachusetts public institutions have jumped 59% since 2000, while household incomes only grew by 13% during the time.
Massachusetts has cut state financial aid by 47% since 2002, according to the report, as other states have increased it by an average of 15% per student.
The National Association of State Student Grant and Aid Programs ranked Massachusetts 37th in the nation in terms of providing funding for student financial aid, trailing far behind top-spending states such as Kentucky, Georgia and Louisiana.
Gov. Maura Healey has also focused on college affordability by covering tuition costs and expanding loan repayment programs. Last year, she pushed a plan through the Legislature that devotes $20 million to make community college free for Massachusetts residents 25 and older who do not already have a degree.
Healey has also diverted more funds to a program, which launched in 2022, that pays off up to $300,000 in college loans for healthcare professionals in a variety of disciplines, including dental, medical, mental health and substance abuse.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.