BETHLEHEM, Pa. — At least 5,600 borrowers in Pennsylvania will be eligible for the latest round of student loan forgiveness, the White House announced Friday.
As part of a state-by-state breakdown, the Biden-Harris Administration said nearly 153,000 borrowers nationwide would get $1.2 billion under the Saving on a Valuable Education, or SAVE, plan.
That includes $45.1 million for Pennsylvania-based borrowers.
“When we talk about fixing a broken student loan system, this is what we’re talking about.”Education Secretary Miguel Cardona
Servicers already have started processing those payments, the White House said in a release.
Friday’s announcement comes months after the Supreme Court blocked the administration’s most ambitious relief plan and said President Biden didn’t have the authority to cancel student debt.
The SAVE Plan
“When we talk about fixing a broken student loan system, this is what we’re talking about,” U.S. Education Secretary Miguel Cardona said in the release.
Cardona said the numbers “demonstrate that we won’t ever stop fighting to make higher education more affordable and accessible for more Americans.”
According to the White House, borrowers in every state and in U.S. territories were notified Wednesday they will have their loans canceled and would see their loans forgiven on their accounts in the coming weeks.
The U.S. Education Department said it will continue to identify and discharge other borrowers who enroll in SAVE and are eligible for debt forgiveness.
Eligibility for SAVE
For a borrower to be eligible, they must be enrolled in the SAVE Plan, have made at least 10 years of payments, and have originally taken out $12,000 or less for college.
For every $1,000 borrowed above $12,000, a borrower can get forgiveness after an additional year of payments.
All borrowers on SAVE get forgiveness after 20 or 25 years, depending on whether they have loans for graduate school.
The White House said the SAVE benefit is based upon the original principal balance of all Federal loans borrowed, not what a borrower currently owes or the amount of an individual loan.
Those who believe they are eligible for SAVE are encouraged to sign up at StudentAid.gov/SAVE.
What else to know
The SAVE Plan replaces the Revised Pay As You Earn, or REPAYE, plan, so borrowers on that plan automatically will get the benefits of the new SAVE Plan.
The SAVE Plan is an income-driven repayment plan and calculates a monthly payment based on income and family size.
It’s designed to give borrowers who originally borrowed $12,000 or less forgiveness after as few as 10 years, and lower payments for borrowers whose payment window extends beyond that time frame.
The Education Department said the SAVE Plan also eliminates 100% of remaining monthly interest for both subsidized and unsubsidized loans after a borrower makes a full scheduled payment.
That means the loan balance won’t grow due to unpaid interest accrued.
