If you’re enrolled in SAVE — the Biden administration’s income-driven student loan repayment program that launched in August of 2023 — you may be receiving some good news this month. In mid-January, the Biden administration announced that borrowers entitled to student loan forgiveness under the SAVE repayment program would qualify for that forgiveness not in July of 2024, as expected, but this month — meaning, eligible borrowers will have their full debt canceled immediately.
“We’ve been able to deliver this six months ahead of schedule, which I think is really important,” White House Press Secretary Karine Jean-Pierre said to Fatherly after the announcement. “It’s going to particularly help the community college borrowers, the low-income borrowers, and those struggling to repay their loans. It’s part of our ongoing efforts to act as quickly as possible to give our borrowers more breathing room… Student [debt] crushes families. It crushes them. You go to school because you feel like it’s important to invest in your education, and you come out and you have these loans that are crushing you.”
Who qualifies for the SAVE forgiveness?
The folks who qualify for SAVE forgiveness are a targeted group: those who took out $12,000 or less for their original loan balance and have been in repayment for at least 10 years.
Loan forgiveness will happen automatically in February, and qualifying borrowers who are enrolled in SAVE don’t need to do anything at all, the administration reports.
As of this writing, the administration doesn’t yet have official data on the number of borrowers whose loans will be canceled this month. “What I will say is: 6.9 million borrowers are enrolled in the SAVE plan, and 3.9 million have a monthly payment of $0,” says Jean-Pierre.
How to get your own forgiveness
Even if you aren’t one of the borrowers getting student loan forgiveness this month, that doesn’t mean that you’re out of luck entirely — and if you haven’t yet signed up for SAVE, you should consider doing so ASAP.
In their mid-January announcement, the Biden administration stated that if qualifying borrowers sign up for SAVE, that the Department of Education “will also email borrowers not on SAVE who can receive forgiveness as soon as they sign up for the plan. Moving forward, the Department will continue to identify and discharge the loans of eligible borrowers on a regular basis.”
The reasons are myriad: If you’re a low- or middle-income borrower, the program will likely help lower your monthly payments and will pause your interest as you pay into the program.
For those borrowers with $12,000 or less on your original principal loan balance, SAVE can get you to forgiveness much faster. But even if you owe more, SAVE can put you on a path to forgiveness sooner.
“We encourage all borrowers who may be eligible for early debt cancellation to sign up for the SAVE Plan program,” Jean-Pierre says.
What changed under the SAVE Plan
SAVE is Biden’s new income-driven repayment plan, which was announced last year. It replaced an existing income-driven repayment program, REPAYE, but is different from it in key ways — and in ways that help save borrowers money:
- It lowers monthly payments for mostly low- and middle-income borrowers with federal loans based on their family size and their income.
- Borrowers will pay down, at maximum, 5% of their discretionary income monthly on their loans.
- Borrowers who earn less than $15 an hour won’t pay anything monthly, but will still be on track for loan cancellation.
- SAVE protects more of the borrower’s income from repayment: For example, if you’re a family of three making about $60,000 a year, your monthly payment will only be $34
- The program waives unpaid interest
- The program erases loans for borrowers who have principal balances of $12,000 or less and have made a decade of payments.
- For borrowers with more than $12,000 on their original principal loan, SAVE adds one more year of repayment for each additional $1,000 of loans taken out, maxing out at 20 to 25 years of repayment.
When SAVE was announced, the Biden administration warned that elements of the program — such as loan forgiveness — would take some time. Now, forgiveness is starting to happen ahead of schedule.
Is more loan forgiveness coming?
Never say never. When asked if borrowers can expect additional, broader student loan actions in the near future, Jean-Pierre responded: “You should always keep your ear on the ground for actions that we’re going to take to make sure that we give debt relief to borrowers. The president has tasked his team, the Department of Education, and his policy team here to find ways to give a little bit of breathing room to families who feel crushed by student loan debts. So stay tuned.”
Since Biden’s mid-January announcement about SAVE, Forbes reports that there have been some other moves made on loans. After the Supreme Court struck down Biden’s plan to cancel $20,000 in loans for federal borrowers across the U.S., the administration announced they would work on a “Plan B” — a plan that would involve more targeted loan forgiveness. Later this month, the DOE will host a rulemaking hearing on that “Plan B” and will figure out who may qualify for loans in that hearing.