On Feb. 21, 2024, President Joe Biden approved $1.2 billion in student debt cancellation for almost 153,000 borrowers currently enrolled in Saving on a Valuable Education (SAVE) repayment plans, lowering their financial burden. Originally planned for July, this approval relieves borrowers almost six months early.
The SAVE plan is an income-driven repayment plan that bases payments on a borrower’s income and family size – not their loan balance – and forgives remaining balances after a certain number of years.
The U.S. Department of Education (DOE) reports that borrowers who were enrolled in the SAVE plan for at least 10 years and originally borrowed $12,000 or less for college are eligible for this new debt forgiveness plan. For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments. The maximum repayment period is capped at 20 years for those with only undergraduate loans and 25 years for individuals with any graduate school loans.
The DOE states that eligible borrowers have received an email informing them of the debt forgiveness. Borrowers who got emails about receiving relief through the SAVE program do not need to take any further action to receive loan forgiveness. The department also plans to directly contact other borrowers who are eligible for early relief but not enrolled in the SAVE plan.
While this debt forgiveness impacts many people with student loans, concerned borrowers can contact their loan servicer to confirm whether they qualify for student debt relief. Additionally, borrowers are encouraged to visit the DOE’s website and sign up to receive email and text updates for the latest information.
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