Everything to Know About the New SAVE Student Loan Forgiveness Plan
President Biden‘s student loan forgiveness plan has been a contentious part of his domestic policy since he first campaigned on the issue four years ago. In 2023, the administration unveiled the SAVE plan for student loan forgiveness, which partially launched last summer and is expected to begin forgiving borrowers’ loans in just a few weeks.
If you haven’t already applied for the program, read up on what you need to know.
What does SAVE stand for?
SAVE stands for Saving on a Valuable Education. The program uses borrowers’ income and family size to determine their exact payment amount. Borrowers making under a certain income can have their monthly payments eliminated altogether, while most of the others enrolled in SAVE will have their payments cut in half this year.
When does SAVE student loan forgiveness begin?
Borrowers eligible for forgiveness will begin receiving emails from the Department of Education in February. The Biden Administration originally laid out a timeline of July 1 for borrowers to begin seeing relief, though that deadline still remains for other benefits such as reducing payments to five percent of one’s disposable income.
When will I receive news about my student loan forgiveness?
The Department of Education said it will begin notifying SAVE borrowers who are eligible for forgiveness in February that their loans are being discharged with no further action needed on their part.
How much loan forgiveness am I eligible for?
SAVE loan forgiveness is available for borrowers who have made at least 10 years of monthly payments and originally took out $12,000 or less for undergraduate or graduate studies. After that, for every $1,000 above $12,000, a borrow can receive forgiveness after an additional year of payments.
“Today’s announcement will help struggling borrowers who have been making loan payments for years, including many who never graduated from college,” Education 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.”
How do I apply for SAVE student loan forgiveness?
Eligible borrows can apply for SAVE through the Federal Student Aid website.