Student loan forgiveness under SAVE plan to begin in February — 6 months early

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WASHINGTON — President Joe Biden said Friday some student borrowers will have their debts canceled as early as next month as the new SAVE repayment plan gets underway six months ahead of schedule.

As part of the administration’s effort to “fix the broken student loan system,” the Biden-Harris administration in August announced the launch of the Saving on a Valuable Education repayment plan, or SAVE.

Touted as“the most affordable repayment plan ever created,” the income-driven repayment plan — which calculates payments based on a borrower’s income and family size, instead of their loan balance — was initially scheduled to begin in July.

But on Friday, Biden said one of the most impactful provisions of the plan would kick off nearly six months ahead of schedule.

“Starting next month, borrowers enrolled in SAVE who took out less than $12,000 in loans and have been in repayment for 10 years will get their remaining student debt canceled immediately,” the president said.

The move, part of the administration’s ongoing effort to quickly “give more borrowers breathing room so they can get out from under the burden of student loan debt,” is designed to particularly offer help to community college borrowers, who according to the Department of Education typically borrow smaller amounts.

“Beyond being the most affordable student loan repayment plan ever available, the Biden-Harris Administration designed the SAVE Plan to put community college students and other low-balance borrowers on a faster track to debt forgiveness than ever before,” said Secretary of Education Miguel Cardona

The White House’s ability to speed up debt relief “is a testament to the Biden Administration’s commitment to delivering relief to as many borrowers as possible, as quickly as possible,” Cardona said.

Last year, the U.S. Supreme Court rejected Biden’s ambitious $400 billion loan forgiveness plan. In response, the president declared “this fight [was] not over,” and announced the administration would launch a process so borrowers could see their debts canceled by other means,

Around 6.9 million borrowers have enrolled in the SAVE plan, which allows single borrowers who earn less than $32,800 per year or those in a family of four making less than $67,500 to have a $0 monthly payment.

“In the wake of the Supreme Court’s decision on our student debt relief plan, we are continuing to pursue an alternative path to deliver student debt relief to as many borrowers as possible as quickly as possible,” Biden said. “I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.”