The Biden administration announced on Friday it would soon begin forgiving the student loans of borrowers who have been in repayment for a decade or more and originally took out $12,000 or less.
To qualify for the relief, which could come as early as next month, borrowers will also need to be enrolled in the administration’s new Saving on a Valuable Education, or SAVE, plan.
“Borrowers enrolled in SAVE who are eligible for early forgiveness will have their debts cancelled immediately starting next month, with no action on their part,” the U.S. Department of Education said.
The Department also said it was kicking off an outreach and email campaign to get as many eligible borrowers as possible to sign up for its SAVE plan, so that they may benefit from this relief too. As of early January, 6.9 million borrowers were enrolled in what the administration billed to student loan borrowers as “the most affordable repayment plan ever created.”
“Today’s announcement will help struggling borrowers who have been making loan payments for years, including many who never graduated from college,” said Under Secretary James Kvaal said in a statement. “Giving borrowers with smaller loans a faster path to being debt free will help many borrowers avoid financial distress and have peace of mind.”
Under the SAVE plan, the usual timeline for student loan borrowers to get forgiveness is 20 years or 25 years. The 10-year period applies to those who took out $12,000 or less in undergraduate or graduate postsecondary studies.
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