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# Biden-Harris Administration to Shorten Path to Debt Cancellation for Some SAVE Borrowers

# Biden-Harris Administration to Shorten Path to Debt Cancellation for Some SAVE Borrowers

January 11, 2024

**Contact:  **press@ed.gov

                                    -        
*New  data show 6.9 million borrowers are enrolled in the Administration’s most  affordable repayment plan *

Today, the Biden-Harris Administration announced that next month  it will start providing forgiveness after as few as 10 years of payments for  borrowers on the Saving on a Valuable Education (SAVE) Plan who originally took  out $12,000 or less for college. 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. To help as many  borrowers as possible benefit from this action, the (Department) is kicking off  an outreach and email campaign to encourage borrowers who are not currently  enrolled in SAVE to sign up because they may benefit from this shortened  repayment period. The Administration is also announcing today that there are  now 6.9 million borrowers enrolled in the SAVE Plan as of early January, more  than double the enrollment on the Revised Pay As You Earn (REPAYE) plan  it replaced in August.

The shorter time  to forgiveness benefit will particularly help  borrowers who attended community colleges; these students typically borrow  smaller amounts. Overall, the Department estimates that the SAVE Plan will make  85% of future community college borrowers debt free within 10 years. The SAVE  Plan will also help borrowers who are more likely to struggle with their loans,  as most borrowers in default originally borrowed $12,000 or less.

“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 U.S. Secretary of Education Miguel Cardona. “Our  ability to deliver this relief to borrowers months ahead of schedule is a  testament to the Biden Administration’s commitment to delivering relief to as  many borrowers as possible, as quickly as possible. Today’s announcement gives  borrowers an even greater reason to check out the SAVE plan and find out if  they may qualify for earlier debt relief. With lower monthly payments, protection  from runaway interest, and faster timelines to debt forgiveness, President  Biden’s SAVE plan is not only benefitting millions of current borrowers but  also providing the students of today and tomorrow with a more affordable  pathway to college degrees and credentials.”

The Department is accelerating this  benefit months ahead of the date previously laid out in the Biden-Harris  Administration’s final regulations for implementing the SAVE plan, which is  July 1, 2024. Borrowers enrolled in SAVE who have made at least 10 years of  monthly payments and originally took out $12,000 or less for undergraduate or  graduate postsecondary studies are eligible for forgiveness. For every $1,000  borrowed above $12,000, a borrower can receive forgiveness after an additional  year of payments. That means a borrower who originally borrowed less than  $21,000 will be eligible for forgiveness faster than the 20-year timeline for  undergraduate borrowers on SAVE. The benefit is based upon the original  principal balance of all federal loans borrowed to attend school, not what a  borrower currently owes or the amount of an individual loan. Periods that count  toward the forgiveness benefits include months during the payment pause and  time in repayment as determined through the payment count adjustment.

“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. “Giving borrowers with smaller loans a faster path to  being debt free will help many borrowers avoid financial distress and have  peace of mind.”

The Biden-Harris Administration is also  kicking off a wave of outreach to encourage more borrowers to enroll in SAVE,  particularly those who may be able eligible for immediate forgiveness. Today,  the Department will begin emailing borrowers whose balances and time in  repayment indicates they may benefit from the shortened time to forgiveness  provision. The Department will also work with the SAVE on Student Debt  coalition and other supportive organizations to conduct further outreach in the  coming months. 

In February, the Department will start notifying borrowers on  SAVE who are eligible for forgiveness that their loans are being discharged  automatically with no action needed on the borrower’s part. The Department  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  Department strongly encourages all eligible borrowers who originally borrowed  $12,000 or less to apply for SAVE as soon as possible. 

For  student borrowers, the SAVE Plan remains the most affordable repayment option in most cases.  Under the SAVE Plan, single borrowers who earn less than $32,800 per year or  those in a family of four making less than $67,500 have a $0 payment.  The SAVE Plan also ensures that a borrower’s balance will never grow due to  unpaid interest as long as they are making their monthly payments. The improved  application allows borrowers to have their income securely accessed through the  Internal Revenue Service so they do not need to re-certify their income or  reapply for plans like  SAVE each year. Savings for  borrowers will increase again when the Department implements further payment  reductions for borrowers with undergraduate loans in July 2024. 

**Continued Increases in SAVE Enrollment**

The Biden-Harris Administration  also announced today that there are now 6.9 million borrowers enrolled in the  SAVE plan. This includes 2.8 million borrowers on SAVE who are new to an income-driven repayment (IDR) plan and approximately 700,000 who have switched from another income-driven repayment  plan. Overall, borrowers are repaying $374 billion in federal student loans on  the plan, about 30% of all Direct Loans dollars in repayment,  deferment, or forbearance.

Borrowers  are continuing to see significant financial benefits from being on SAVE  compared to the previous REPAYE Plan. Of SAVE enrollees, 3.9 million have a $0  payment, while borrowers who owe a payment are saving an estimated $117 a  month (just over $1,400 a year). These savings don’t include the interest that  borrowers avoid each month after they satisfy their repayment obligation.  Department data show that SAVE enrollment continues to be well targeted, as 75%  of SAVE borrowers also received Pell Grants, which are awarded to low-income  college students.

The  SAVE Plan builds on the Biden-Harris Administration’s work to reduce the burden  of student debt on America’s families. The Biden-Harris Administration has  already approved nearly $132 billion in targeted relief for more than 3.6  million borrowers. Just last month, the Department announced the approval of an  additional $4.8 billion in student loan debt relief for 80,300 borrowers. The  Biden-Harris Administration has now approved:
- Almost $44 billion in  IDR relief for nearly 901,000 borrowers;
- $53.5 billion for almost 750,000 borrowers through fixes to Public Service Loan Forgiveness that began in October 2021. By contrast, only about 7,000 borrowers had received forgiveness through these programs at the start of the Biden-Harris Administration.

The Biden-Harris Administration  is currently in the process of writing proposed regulations that would make  more borrowers eligible for debt relief. It also recently finalized regulations  that help create the most  effective accountability system ever  for colleges that leave students with unaffordable debts and will continue to  take action to reduce the cost of college and improve the value of  postsecondary education.

Borrowers can view more  resources and tools that help them find the right repayment plan for their  current circumstances at StudentAid.gov/restart. More information about SAVE  is available at StudentAid.gov/save. 

 

**State**

**Borrower Count**

 

 

Alabama 

102,900 

 

 

Alaska 

11,000 

 

 

Arizona 

148,400 

 

 

Arkansas 

65,100 

 

 

California 

597,300 

 

 

Colorado 

134,300 

 

 

Connecticut 

71,500 

 

 

Delaware 

21,000 

 

 

District of    Columbia 

21,900 

 

 

Florida 

475,800 

 

 

Georgia 

286,000 

 

 

Hawaii 

19,400 

 

 

Idaho 

41,900 

 

 

Illinois 

244,700 

 

 

Indiana 

147,800 

 

 

Iowa 

68,400 

 

 

Kansas 

60,000 

 

 

Kentucky 

102,500 

 

 

Louisiana 

101,900 

 

 

Maine 

32,500 

 

 

Maryland 

127,800 

 

 

Massachusetts 

127,000 

 

 

Michigan 

239,700 

 

 

Minnesota 

131,500 

 

 

Mississippi 

69,900 

 

 

Missouri 

136,700 

 

 

Montana 

23,100 

 

 

Nebraska 

38,500 

 

 

Nevada 

59,400 

 

 

New Hampshire 

27,600 

 

 

New Jersey 

167,200 

 

 

New Mexico 

40,300 

 

 

New York 

374,300 

 

 

North Carolina 

237,800 

 

 

North Dakota 

13,100 

 

 

Ohio 

299,600 

 

 

Oklahoma 

77,200 

 

 

Oregon 

104,700 

 

 

Pennsylvania 

289,800 

 

 

Puerto Rico 

50,100 

 

 

Rhode Island 

21,800 

 

 

South Carolina 

131,200 

 

 

South Dakota 

18,500 

 

 

Tennessee 

151,600 

 

 

Texas 

591,700 

 

 

Utah 

55,000 

 

 

Vermont 

13,600 

 

 

Virginia 

177,900 

 

 

Washington 

133,500 

 

 

West Virginia 

38,500 

 

 

Wisconsin 

120,700 

 

 

Wyoming 

8,600 

 

 

All Other    Locations 

70,600 

 

 

**Total**

**6,922,700**

 

Data as    of early January 2024 

 

 

*The sum    of individual values may not equal the total due to rounding and timing.* 

 

 
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