On Wednesday, the White House announced the approval of $7.7 billion in student debt cancellation for 160,500 borrowers. This move is part of the ongoing effort to provide relief following the Supreme Court’s decision last year to block President Joe Biden’s broad-based college loan forgiveness plan.

With this latest round of forgiveness, the administration has erased a total of $167 billion in student loans for 4.75 million people, or about 1 in 10 student loan borrowers, according to the Department of Education. This group of borrowers qualifying for forgiveness include public servants such as teachers and law enforcement officers, along with tens of thousands of individuals who have enrolled in Biden’s new loan repayment program, SAVE. Created last year, the SAVE program adjusts monthly payments based on the borrower’s income, reducing financial burdens and addressing the issue of interest accumulation that plagued earlier repayment plans.

“One out of every 10 federal student loan borrowers approved for debt relief means one out of every 10 borrowers now has financial breathing room and a burden lifted,” said U.S. Secretary of Education Miguel Cardona. Concerns about the cost of college are increasing, with about half of Americans believing college is only worth the expense if it doesn’t lead to debt, according to a recent Pew Research Center analysis. Only about 1 in 5 Gen Z college graduates feel their degree was worth the investment, compared to more than half of baby boomers, a new MassMutual survey found.

The Biden administration’s latest round of forgiveness benefits three groups of borrowers:

  1. 66,900 borrowers will have $5.2 billion forgiven through the Public Service Loan Forgiveness program, which helps public servants like teachers, nurses, and law enforcement officers cancel their debt after 10 years of repayments.
  2. 54,300 borrowers will have $613 million forgiven through the SAVE plan.
  3. 39,200 borrowers will have $1.9 billion forgiven through adjustments to their income-driven repayment plans, which were often mismanaged by loan servicers, hindering some borrowers from achieving forgiveness.

Those who qualify under this latest round of debt cancellation will receive an email about their approval, with the debt cancellation processed in the coming weeks.

The Biden administration is working on a new plan to provide broad-based loan forgiveness under the Higher Education Act. This new initiative could potentially offer relief to about 30 million borrowers by erasing some or all of their college loans. The public comment period for the new regulation closed on May 17, and the Department of Education is currently reviewing the thousands of comments received. “Our goal is to publish a final rule that results in delivering relief this fall,” stated the Education Department.

The income-driven repayment plan under SAVE bases monthly payments on income and family size, with some lower-income households paying little to nothing each month. For instance, a family of four with an annual income of less than $50,000 would have monthly payments of $0. The program also eliminates snowballing interest, a problem in previous plans where balances grew if monthly payments didn’t cover all interest, leading to “negative amortization.” This issue often caused borrowers to end up with larger balances even after years of repayment.