The Biden administration has announced a new student loan forgiveness plan, targeting borrowers with debts of $12,000 or less who have made at least 10 years of repayments and are enrolled in the SAVE Plan.
This relief is expected to help community college attendees and aims to make 85% of future community college borrowers debt free within 10 years.
The Department of Education (DoE) wrote in a statement, “Borrowers enrolled in SAVE who are eligible for early forgiveness will have their debts canceled immediately starting next month, with no action on their part.”
The action will “help struggling borrowers who have been making loan payments for years, including many who never graduated from college. Giving borrowers with smaller loans a faster path to being debt free will help many borrowers avoid financial distress and have peace of mind,” claimed U.S. Under Secretary of Education, James Kvaal.
An outreach campaign has been launched to encourage enrollment in the SAVE Plan.
U.S. Secretary of Education, Miguel Cardona, called the SAVE plan “the most affordable student loan repayment plan ever available.”
As of January, 6.9 million borrowers were enrolled, with significant benefits for participants, including lower monthly payments and faster debt forgiveness.
“With lower monthly payments, protection from runaway interest, and faster timelines to debt forgiveness, President Biden’s SAVE plan is not only benefiting millions of current borrowers but also providing the students of today and tomorrow with a more affordable pathway to college degrees and credentials,” explained Cardona.
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