The Biden administration on Wednesday announced it would forgive $1.2 billion in student loan debt for borrowers enrolled in a certain income-driven repayment plan.
The discharged debt will apply to nearly 153,000 borrowers who are eligible for shortened forgiveness under the income-based Saving on a Valuable Education (SAVE) Plan.
Eligible borrowers must have made at least 10 years of payments after having taken out federal loans of $12,000 or less for college. Those with balances of more than $12,000 may also be eligible once they have made another year's worth of payments for every $1,000 over the $12,000 limit.
All eligible borrowers enrolled under a SAVE Plan have their debt forgiven after 20 or 25 years, depending on whether they borrowed money for graduate school.
Student loan borrowers facing hardships could have debt forgiven
The Biden administration is considering a new rule that would forgive federal student loans for borrowers who face a high risk of default.
Borrowers who are eligible will receive emails from the administration and won't have to take any more action to get their benefits. Loan servicers will process their discharged loans automatically.
"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.
To date, the Biden administration has forgiven roughly $138 billion through student loan relief. It is working on rules proposals it hopes will expand the pool of borrowers eligible for relief, including to those experiencing hardship.
The White House encourages borrowers who believe they may be eligible for relief under the SAVE Plan to sign up on the federal student aid website.
@scrippsnews 🎓 The Biden Administration has canceled anther $1.2 billion in student loan debt this week for nearly 153,000 borrowers. Here’s who qualifies. #StudentLoans #money ♬ original sound - Scripps News
