Press Release
☷Biden Harris Administration to Shorten Path to Debt Cancellation for Some SAVE Borrowers
U.S. Department of Education ( By Press Release office)
Jan 13,2024
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The latest data shows that around 6 . 9 million borrowers have signed up for the Administration ' s affordable repayment plan . Starting next month , the Biden - Harris Administration will begin forgiving loans for borrowers on the Saving on a Valuable Education ( SAVE ) Plan after just 10 years of payments , as long as they initially borrowed $12 , 000 or less for college . Those who qualify for early forgiveness will have their debts cancelled without needing to take any action . To make sure as many borrowers as possible benefit from this , the Department will be launching an outreach and email campaign to encourage those who are not enrolled in SAVE to sign up , as they may also be eligible for the shortened repayment period . Additionally , it has been announced today that as of early January , there are now 6 . 9 million borrowers enrolled in the SAVE Plan , which is more than double the enrollment of the previous plan it replaced in August . This shorter forgiveness period will especially help community college students , who usually borrow less money . The Department estimates that the SAVE Plan will make 85% of future community college borrowers debt - free within 10 years . It will also assist borrowers who are more likely to struggle with their loans , as most defaulters originally borrowed $12 , 000 or less . U . S . Secretary of Education Miguel Cardona expressed that the SAVE Plan was designed to provide the most affordable repayment option and help community college students and low - balance borrowers achieve debt forgiveness faster than ever before . The Department ' s ability to deliver this relief ahead of schedule demonstrates the Biden Administration ' s dedication to providing relief to as many borrowers as possible in a timely manner . This announcement gives borrowers even more reason to explore the SAVE Plan and see if they qualify for earlier debt relief . With lower monthly payments , protection from high interest rates , and a faster timeline to debt forgiveness , President Biden ' s SAVE Plan not only benefits millions of current borrowers , but also provides a more affordable pathway to college degrees and credentials for current and future students . The Department is accelerating this benefit , months ahead of the previously stated date in the Biden - Harris Administration ' s final regulations for implementing the SAVE Plan , which was July 1 , 2024 . Borrowers enrolled in SAVE who have made at least 10 years of monthly payments and borrowed $12 , 000 or less for undergraduate or graduate studies are eligible for forgiveness . If you borrowed more than $12 , 000 , you can get forgiveness after an extra year of payments for every $1 , 000 borrowed . This means that borrowers who borrowed less than $21 , 000 will get forgiveness faster than the 20 - year timeline for undergraduate borrowers on SAVE . The forgiveness is based on the original amount borrowed for school , not the current amount owed . This includes periods during the payment pause and repayment . Under Secretary James Kvaal said that this announcement will help borrowers who have been making loan payments for years , even those who didn ' t graduate from college . The Biden - Harris Administration is reaching out to encourage more borrowers to enroll in SAVE , especially those who are eligible for immediate forgiveness . The Department will be emailing borrowers who may benefit from the shorter forgiveness provision . In February , borrowers on SAVE who are eligible for forgiveness will be notified that their loans will be discharged automatically . The Department urges eligible borrowers who borrowed $12 , 000 or less to apply for SAVE as soon as possible . The SAVE Plan is the most affordable repayment option for most student borrowers . The application has been improved to securely access income information from the IRS , eliminating the need for yearly recertification . Savings for borrowers will increase in July 2024 with further payment reductions . The Biden - Harris Administration also announced that there are now 6 . If you ' re a borrower , you can check out more resources and tools to find the right repayment plan for your situation at StudentAid . gov/restart . And if you want more info specifically about SAVE , head over to StudentAid . gov/save . The cool thing is that borrowers are seeing some major financial benefits from being on SAVE compared to the previous REPAYE Plan . Out of all the SAVE enrollees , a whopping 3 . 9 million have a $0 payment . And for those who actually owe a payment , they ' re saving around $117 a month ( which adds up to over $1 , 400 a year ) . And that ' s not even counting the interest they ' re avoiding each month once they pay off their obligation . Department data shows that SAVE enrollment is doing a great job targeting the right people , with 75% of SAVE borrowers also receiving Pell Grants , which are given to low - income college students . The SAVE Plan is part of the Biden - Harris Administration ' s efforts to lighten the load of student debt on American families . So far , they ' ve already given out nearly $132 billion in targeted relief to over 3 . 6 million borrowers . Just last month , they approved an additional $4 . 8 billion in debt relief for 80 , 300 borrowers . Overall , the Biden - Harris Administration has approved almost $44 billion in IDR relief for nearly 901 , 000 borrowers and $53 . 5 billion for almost 750 , 000 borrowers through fixes to Public Service Loan Forgiveness since October 2021 . In comparison , when the Biden - Harris Administration started , only about 7 , 000 borrowers had received forgiveness through these programs . There are a whopping 9 million borrowers enrolled in the SAVE plan . This includes 2 . 8 million newbies who just joined an income - driven repayment plan , as well as around 700 , 000 who switched from a different income - driven repayment plan . Overall , these borrowers are paying back a massive $374 billion in federal student loans through the SAVE plan , which makes up about 30% of all Direct Loans in repayment , deferment , or forbearance . Right now , the Biden - Harris Administration is working on proposed regulations that will make more borrowers eligible for debt relief . They ' ve also recently finalized regulations that create the most effective accountability system ever for colleges that leave students with unaffordable debts . They ' re committed to taking action to reduce college costs and improve the value of postsecondary education . Please note that these numbers are approximate and may not add up exactly due to rounding and timing . The data is as of early January 2024 .
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