Student loan borrowers eligible for forgiveness under the Saving on a Valuable Education (SAVE) plan should expect their loans to be discharged soon.
On Wednesday, Feb. 21, 2024, the Biden-Harris Administration announced that it will automatically discharge $1.2 billion in loans for nearly 153,000 borrowers who are eligible under the SAVE plan.
Borrowers will begin receiving emails from President Joe Biden on Wednesday to let them know if they are eligible. They will not need to do anything to receive forgiveness. Student loan servicers will begin to process forgiveness in the coming days.
From now on, borrowers who are eligible for forgiveness under the SAVE plan will have their loans automatically discharged. The Department of Education will also begin emailing borrowers who can become eligible for forgiveness if they switch to the SAVE plan.
Who is eligible for forgiveness?
Borrowers who are eligible for forgiveness must meet the following qualifications:
- Be enrolled in the SAVE plan
- Have been making at least 10 years of payments
- Have originally taken out $12,000 or less for college
All borrowers on the SAVE plan receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school. The benefit is based on the original principal balance of all federal loans borrowed and not what the borrower currently owes or the amount of an individual loan.
You can learn more about forgiveness eligibility at studentaid.gov.
What are the benefits of the SAVE plan?
The SAVE plan replaced the Revised Pay As You Earn (REPAYE) Plan. The SAVE plan is an income-driven repayment plan and a borrower’s monthly payment is determined based on their income and family size.
- The SAVE plan increases the income exemption from 150% to 225% of the poverty line.
- The plan eliminates 100% of the remaining interest for both subsidized and unsubsidized loans after a scheduled payment is made.
- The SAVE plan excludes spousal income for borrowers who are married and file separately.
The rest of the benefits of the SAVE plan will be implemented in July of this year.
- Payments on undergraduate loans will be cut in half (reduced from 10% to 5% of income above 225% of the poverty line).
- Borrowers who consolidate will not lose progress toward forgiveness.
- Borrowers will automatically receive credit toward forgiveness for specific periods of deferment and forbearance. Credit for deferments will include periods of deferment before July 1, 2024. Credit for forbearances will only be applicable to forbearances received on or after July 1, 2024.
There are now 7.5 million borrowers enrolled in the SAVE plan. Out of those enrolled, 4.3 million have a monthly payment of $0.
---> More: What to know about the new SAVE student loan repayment plan
How to check if you are on the SAVE plan
You can check and see if you’re on the SAVE plan by taking the following steps:
- Log in to StudentAid.gov
- Go to your My Aid page
- Scroll down, and view your loans.
Each loan will list a repayment plan.
If you don’t have a StudentAid.gov account, you can create an account.
Borrowers who believe they are eligible for forgiveness under the SAVE plan are encouraged to sign up at StudentAid.gov/save.