(Photo/Getty Images)
By Karen Stokes
The Biden-Harris Administration announced that 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.
There are 7.5 million borrowers who are now enrolled in SAVE, 4.3 million of whom have a $0 monthly payment.
President Biden and Miguel Cardona, United States Secretary of Education (Photo/CNBC)
“With today’s announcement, we are once again sending a clear message to borrowers who had low balances: if you’ve been paying for a decade, you’ve done your part, and you deserve relief,” said U.S. Secretary of Education Miguel Cardona. “Under President Biden’s leadership, our Administration has now approved loan forgiveness for nearly 3.9 million borrowers, and our historic fight to cancel student debt isn’t over yet.”
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.
Borrowers will begin receiving emails from President Biden this week telling them they are approved for forgiveness and will not need to take any further action to receive relief. In the coming days servicers will process the forgiveness and borrowers will see their loans forgiven on their accounts. Moving forward, borrowers who meet the eligibility criteria for forgiveness under the SAVE Plan will have their loans automatically discharged with no action needed on their part.