The Biden administration announced Friday that some student loan borrowers who signed up for the government’s repayment plan known as SAVE will get their debt erased starting in February, several months ahead of schedule.
Starting next month, borrowers enrolled in SAVE who took out less than $12,000 in federal loans and have been paying it off for at least 10 years will have their remaining debt cancelled.
The SAVE plan, which had been set to take effect in July, allows borrowers to make payments according to their income. Previous such plans have typically required borrowers to repay their loans for 20 or 25 years before qualifying for forgiveness.
In a statement at launch, the White House said the plan will “cut many borrowers’ monthly payments to zero, will save other borrowers around $1,000 per year, will prevent balances from growing because of unpaid interest, and will get more borrowers closer to forgiveness faster.”
The administration said Friday that 6.9 million people have signed up for the plan since it launched last summer. It’s unclear how many of those borrowers qualify for the forgiveness initiative. The SAVE plan is part of the Biden administration’s push to chip away at the country’s monumental student debt crisis in more incremental ways, after the Supreme Court struck down a pandemic-era student loan forgiveness program in June that could have canceled around $400 billion in student debt for roughly 43 million people. Biden made loan forgiveness a key part of his campaign platform in 2020, promising to erase at least $10,000 of student debt per person. He hasn’t quite lived up to that lofty promise, though his administration has wiped out $127 billion in student debt for more than 3.5 million borrowers through existing programs so far.
Clarissa-Jan Lim is a breaking news reporter for MS NOW. She was previously a senior reporter and editor at BuzzFeed News.
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