ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

Loan Forgiveness Under Biden’s SAVE Plan Starts In February Now; Check Eligibility and More

The core requirements for student loan forgiveness through SAVE depend on the originally borrowed amount and how long borrowers have been in repayment.
PUBLISHED JAN 19, 2024
Student loan borrowers and advocates gather for the People's Rally To Cancel Student Debt | Getty Images | Photo by Jemal Countess
Student loan borrowers and advocates gather for the People's Rally To Cancel Student Debt | Getty Images | Photo by Jemal Countess

Benefits of President Joe Biden’s student loan repayment plan are set to kick in months ahead of schedule. President Biden announced that his administration is implementing the forgiveness portion of the Saving on a Valuable Education program, aka SAVE, nearly six months ahead of schedule, as per an official release. The debt cancellation now starts in February instead of July 2024. The Biden administration launched the Income-Driven Repayment plan in 2023.

U.S. President Joe Biden and Education Secretary Miguel Cardona | Getty Images | Photo by Chip Somodevilla
U.S. President Joe Biden and Education Secretary Miguel Cardona | Getty Images | Photo by Chip Somodevilla

The core requirements for student loan forgiveness through SAVE depend on the originally borrowed amount and how long borrowers have been in repayment.



 

Earlier, due to mixed messaging on the complex rollout qualifications, it was widely reported that only loan amounts of $12,000 or less would be eligible for early forgiveness. However, the White House and the Department of Education have now clarified that loan balances over $12,000 will also be eligible for forgiveness. As per the department’s official rules, borrowers who have made enough qualifying payments on their loans will be eligible for forgiveness even if their debt balance is more than $12,000.



 

Here are the other key qualifications:

1. Borrowers must be enrolled in the SAVE repayment plan.

2. Borrowers must have at least 10 years of qualifying payment history if they borrowed $12,000 or less of federal student loans for higher education. For every additional $1,000 above that amount, the qualifying payment history will go up by one year.

NOTE: The period of the pandemic-era payment pause will count on the 10-year timeline, whether or not borrowers were paying for the student debt.

Further, the department will also be contacting borrowers who are eligible for forgiveness but haven’t enrolled in SAVE yet. The White House asked people to look for an email titled: “You may qualify for loan forgiveness on SAVE," as per a CNBC report.

When the new SAVE plan was created by the Biden administration, it was proposed to student loan borrowers as “the most affordable repayment plan ever created,” as it offered more favorable terms to certain people. Under the forgiveness portion of the SAVE plan, the loan balances of borrowers will be forgiven after 10 years of repayments, instead of 20 years, if they had original loan balances of $12,000 or less. Further borrowers with slightly higher balances also win. As per the Education Department, as of early January 2024, about 6.9 million borrowers had enrolled in the new SAVE plan. The plan opened for enrolments in August in 2023.



 

However, some of the provisions of the new program weren’t expected to go into effect until July 2024. These provisions included a reduction of monthly payments for undergraduate borrowers and a shortened timeline to forgiveness for those with small balances. But the latter benefit has now been implemented by the Biden administration ahead of schedule and eligible borrowers can get the relief as soon as next month.

Borrowers who have enrolled for the new SAVE plan and who qualify for forgiveness will benefit sooner from the plan. Further, as per White House's official release, the SAVE plan  particularly benefits the critical or low- and middle-income borrowers, community college students, and borrowers who work in public service. Those who have not signed up for the SAVE plan yet, it is recommended that they do so as soon as possible to expedite the process of forgiveness.

MORE ON MARKET REALIST
The player named Kathy Young missed out on the Showcase Showdown as she had to leave.
3 hours ago
Harrison closed a mega deal by scooping up three post cards for the price of one.
4 hours ago
The guest who brought his father's prized possesion, had already made up his mind.
7 hours ago
Harvey got a genius solution to avoid asking an awkward question to Carson Kressley's family member.
1 day ago
The player could barely control her excitement as she had a near-perfect game on the show.
1 day ago
Harrison knew it was too good of a collection to let go, and he decided to raise the stakes.
2 days ago
The guest who had little no idea about his family heirloom was shocked to know its significance.
2 days ago
Despite making a higher than usual offer, Harrison failed to close the deal.
2 days ago
The guest regretted that she wouldn't be able to keep the highly valued item in her home anymore.
2 days ago
They also triggered a showdown between Mark Cuban and Daniel Lubetsky before closing the deal.
3 days ago
As Heather took a second to solve the final puzzle, Seacrest admitted she made it look easy.
3 days ago
Carey suffered a similar snafu a few months ago while playing the same game of 'Bullseye'.
4 days ago
Fans also share some tips that could've helped Bain win the bonus round but it was too late.
4 days ago
Emily Croke coincidentally got the question related to her great-great aunt, Emily Folger.
4 days ago
Luckily for the veteran host, no one in the studio caught the mistake on time.
4 days ago
The executive producer of the show, Michael Davies later apologized for the spoiled show.
4 days ago
Even the seasoned expert was stumped by the unusual subject of the painting.
4 days ago
In the end, Mr Wonderful cut off Greiner with a deal that the founder of Wad Free couldn't refuse.
5 days ago
Seacrest got geniunely spooked as he couldn't figure out who played a prank on him.
5 days ago
The seller brought some "Secret Service" memorabilia of former Attorney General J. Howard McGrath.
5 days ago