The Department of Education announced this week that it is forgiving another $1.2 billion of student loans for 153,000 borrowers who are eligible for shortened time to forgiveness under President Biden’s Saving on a Valuable Education (SAVE) Plan.
President Biden had been expected to activate this plan in July, but chose to launch it ahead of schedule.
Under the SAVE Plan, borrowers who make at least 10 years of payments and originally took out less than $12,000 are entitled to have their balances forgiven. As well, for every $1,000 over $12,000 that was borrowed, borrowers can receive forgiveness after an additional year of payments.
More than 7 million borrowers are currently enrolled in the SAVE Plan and 4.3 million have a monthly payment of $0, according to the Department of Education.
“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 James Kvaal, the Under Secretary of Education, in a statement. “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.”
The Biden Administration has now canceled $138 billion of federal student loans for 4 million individuals. This includes $56 billion through the Public Service Loan Forgiveness program, $46 billion through income-driven repayment programs, $12 billion for borrowers with disabilities, and $22 billion for individuals through closed school discharges, borrower-defense to repayment, and other court settlements.
