The administration is discharging $1.2 billion in loans for nearly 153,000 eligible borrowers.
02/23/2024 12:25 P.M.
2.5 minute read
The Biden-Harris administration announced this week 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 the Saving on a Valuable Education (SAVE) Plan, according to a press release.
Currently, 7.5 million borrowers are now enrolled in SAVE, and 4.3 million of those borrowers have a $0 monthly payment.
“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.”
In January, Biden announced an expedited timeline for the forgiveness component of the SAVE Plan, allowing borrowers to receive relief sooner than initially projected. To qualify for this forgiveness, individuals must be enrolled in the SAVE Plan, have made a minimum of 10 years of payments, and originally borrowed $12,000 or less for their college education. Additional forgiveness is granted for each $1,000 borrowed beyond the initial $12,000, requiring an extra year of payments.
All SAVE Plan participants become eligible for forgiveness after 20 or 25 years, depending on whether their loans are for graduate school. The forgiveness benefit is determined by the original principal balance of all federal loans taken out for education, not the current outstanding amount or individual loan figures.
“As of today, we have approved loan relief for nearly 3.9 million borrowers who were counting on the Biden-Harris Administration to fix the broken student loan system and provide the forgiveness they earned and have been waiting for,” said U.S. Under Secretary of Education James Kvaal. “For too long the system did not work for borrowers, even when they were eligible for loan forgiveness. Today’s announcement shows that President Biden’s commitment to student debt cancellation continues to deliver.”
Borrowers have begun receiving emails from Biden 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, according to the press release.
The U.S. Department of Education (Department) will continue to identify and discharge the loans on a regular basis, and next week, the Department will 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.
Visit the White House fact sheet for more information.
Related Content from ACA International
DOE Unveils Framework to Enhance Student Loan Servicer Oversight
Navient Announces Transfer of Student Loan Servicing to MOHELA
Remember, subscribe to ACA Daily and Member Alerts under your My ACA profile when logged in to acainternational.org to receive updates on the ACA Huddle.