New student loan forgiveness: $1.2B in debt canceled for these 153,000 borrowers
New student loan forgiveness was announced Wednesday by President Joe Biden.
It’s the first round of forgiveness under the Biden administration’s new Saving on a Valuable Education (SAVE) repayment plan, and extended to 153,000 borrowers Wednesday to erase about $1.2 billion in debt.
Here is who qualifies in the newest round of debt forgiveness:
Loan forgiveness
Those eligible in Wednesday’s round of student debt forgiveness:
- Are enrolled in the Saving on a Valuable Education (SAVE) repayment plan
- Have been in repayment for at least 10 years
- Took out $12,000 or less in loans for college
The U.S. Department of Education identified nearly 153,000 borrowers who meet the criteria and will have their debt canceled starting this week.
Those borrowers will receive an email Feb. 21 from Biden informing them of their imminent relief.
Those who took out more than $12,000 will still be eligible. For every additional $1,000 a borrower initially borrowed, they will receive relief after an additional year of payments, the administration said.
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Student loan SAVE plan
Loan forgiveness under the SAVE repayment plan was originally set to begin in July but was accelerated to provide faster relief to borrowers.
Biden launched the SAVE plan in 2023, which offers far more generous terms than several other income-driven repayment plans that it’s meant to replace.
Previous plans offered cancelation after 20 or 25 years of payments, while the new plan offers it in as little as 10. The new plan also lowers monthly payments for millions of borrowers.
Next week, the Department of Education will also be reaching out directly to borrowers who are eligible for early relief but not currently enrolled in the SAVE Plan to encourage them to enroll as soon as possible.
This story was reported from Detroit. The Associated Press contributed.