The Biden-Harris administration has announced it will automatically discharge $1.2 billion in loans for nearly 153,000 borrowers who are eligible for the shortened time to forgiveness benefit under President Biden’s Saving on a Valuable Education (SAVE) Plan. The action comes as 7.5 million borrowers are enrolled in SAVE, 4.3 million of whom have a $0 monthly payment.
U.S. Under Secretary of Education James Kvaal
Biden announced in January that his administration was accelerating the shortened time to forgiveness component of the SAVE Plan nearly six months earlier than anticipated in order to provide borrowers relief.
For a borrower to be eligible for this forgiveness they must be enrolled in the SAVE Plan, have been making at least 10 years of payments and have originally taken out $12,000 or less for college. For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments. All borrowers on SAVE receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school. The benefit is based upon the original principal balance of all federal loans borrowed to attend school, not what a borrower currently owes or the amount of an individual loan.
The U.S. Department of Education plans to continue to identify and discharge the loans on a regular basis. It expects to start emailing borrowers who can become eligible for this forgiveness if they switch onto SAVE. No action is needed by borrowers who have already enrolled in SAVE. Borrowers who believe they meet these criteria are strongly encouraged to immediately sign up for SAVE at StudentAid.gov/save.
