Nearly 153,000 student loan borrowers had their loans automatically discharged this week, totaling $1.2 billion, thanks to the Biden-Harris administration’s Saving on a Valuable Education (SAVE) Plan.
The debt relief will apply to borrowers enrolled in the SAVE Plan who have been making regular payments over 10 years and who originally took out $12,000 or less in student loans. Those with debt balances above $12,000 can still receive relief at a rate of one additional year of payments per $1,000 over the limit. For example, a borrower owing $15,000 would be able to have their debt forgiven after 13 years of repayment.
“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.
The benefits of the SAVE Plan extend beyond these borrowers, however, with all enrolled in the plan eligible for debt forgiveness after 20 years if they only have undergraduate loans and 25 years if they have debt stemming from graduate school. In July, the U.S. Department of Education will also further reduce SAVE Plan monthly payments from 10% to 5% of a borrower’s discretionary income.
Since Biden took office in 2021, nearly $138 billion in student debt has been discharged through the Public Service Loan Forgiveness program, improvements have been made to income-driven payment plans, and targeted relief has been provided to borrowers with disabilities and those who attended closed, for-profit institutions.
