In a major win for student loan borrowers, President Joe Biden’s administration has just approved $1.2 billion in student debt forgiveness. This relief will benefit approximately 153,000 people enrolled in the Saving on a Valuable Education (SAVE) repayment plan who have been making payments for at least ten years and originally borrowed $12,000 or less for their education.
The best part? Borrowers are receiving this forgiveness six months ahead of schedule, making it a much-needed financial break for those struggling with loan repayments.
How the SAVE Plan Works
The SAVE plan was introduced by the Biden administration to make student loan payments more manageable, particularly for lower- and middle-income borrowers. It reduces monthly payments and speeds up forgiveness for those with smaller loan amounts.
Under this plan, borrowers who took out $12,000 or less are eligible for full loan forgiveness after ten years of payments. For those who borrowed more, an extra year of payments is required for every additional $1,000 borrowed.
For example, someone who borrowed $14,000 would have their loans forgiven after 12 years instead of ten.
Millions Already Receiving Relief
This latest wave of student debt forgiveness is part of a larger effort by the Biden administration to ease the financial burden of education. So far, nearly 3.9 million borrowers have received around $138 billion in student loan relief through different initiatives.
According to Education Secretary Miguel Cardona, many of the people benefiting from this program are from low- and middle-income families, with a large portion having attended community colleges.
“The people getting the debt relief announced today have sacrificed and saved for a decade or more to make their student loan payments,” Cardona said, emphasizing that this move will have a significant impact on struggling borrowers.
How to Know If You Qualify
If you’re eligible for this automatic loan forgiveness, you’ll receive a notification from the Department of Education soon. The best part is that no additional action is needed—the loan discharge will happen automatically.
For those who aren’t currently enrolled in the SAVE plan but believe they might qualify, it’s recommended to visit the official Federal Student Aid website and explore enrollment options.
What’s Next for Student Loan Borrowers?
The Biden administration is continuing to find ways to fix the broken student loan system and provide more relief. While the Supreme Court struck down Biden’s original broad debt forgiveness plan, targeted relief programs like this one show the White House is still pushing forward on student loan reforms.
If you have student loans, now is the time to check if you qualify for relief, explore income-driven repayment options, and stay informed about upcoming policy changes that could impact your financial future.
