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Education Dept. fast-tracks forgiveness for borrowers with smaller student loans

Education Dept. fast-tracks forgiveness for borrowers with smaller student loans


Cory Turner
January 12, 2024
In a surprise move, the Biden administration says it will fast-track a big change, previously scheduled for July, that will soon erase the debts of thousands of federal student loan borrowers — undergraduate as well as graduate students who initially borrowed less than $21,000.
The administration’s cancellation math will work like this: Anyone who borrowed $12,000 or less in federal student loans and has been in repayment for at least 10 years will have their debts automatically erased in February, as long as they first enroll in the Biden administration’s new income-based repayment plan known as SAVE. It does not matter what repayment plan or plans they were in before, so long as they were actively repaying their loans and now enroll in SAVE.
With each additional $1,000 of debt, the window for forgiveness increases by one year. For example, a student who took out $13,000 in loans will now have their debts erased if they’ve been in repayment for 11 years — or in 12 years for those who borrowed $14,000 and so on.
The U.S. Education Department will base the policy on the amount students initially borrowed, not on the amount they currently owe.
“I am proud that my Administration is implementing one of the most impactful provisions of the SAVE plan nearly six months ahead of schedule,” President Biden said in a Friday statement.
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