If you have student loans, you might want to check your email. You might find a message from President Joe Biden in your inbox…and it’s not a scam. 153,000 borrowers are being told their student loan debt is canceled.
Wednesday morning, the White House and Education Department announced the cancellation of $1.2 billion in student debt. Those lucky enough to qualify and receive the email on Wednesday will not need to take any further action. The White House will notify the loan service provider of the cancellation.
WHO QUALIFIES?
- If you've been making student loan payments for 10+ years
- Originally borrowed $12,000 or less for college
WHAT IF YOU BORROWED MORE?
For every $1,000 borrowed above $12,000, you get forgiveness after an additional year of payments. For example:
- If you borrowed $13,000 you will be eligible for forgiveness in 11 years
- If you borrowed $14,0000 you will be eligible for forgiveness in 12 years
- If you borrowed $15,0000 you will be eligible for forgiveness in 13 years
- If you borrowed $16,000 you will be eligible for forgiveness in 14 years
MORE HELP IS COMING:
7.5 million borrowers are enrolled in SAVE program and new provisions of the SAVE plan will be going into effect in July. Those include cutting payments for undergraduate loans in half and allowing periods in deferment of forbearance to count toward forgiveness progress.
The SAVE plan also aims to cap payments at 5% of a borrower’s discretionary income.
ABC Action News sat down with Jon Donenberg, who serves on the White House National Economic Council, about what borrowers need to know.
“These are individuals who have been making their payments month after month, year after year for at least 10 years, some for longer, and what the save program says is if you’re making those payments on a regular basis, then eventually you get the balance of your debt forgiven,” he explained.
Donenberg added that colleges and universities need to work to bring down the cost of tuition in the future.
“We really have a crisis right now. There are more than 1.5 trillion in outstanding student loan debt, and it’s a huge drag on economic growth. It’s preventing young people from buying homes, getting married, moving out of their parent’s houses making a car payment to get to your job, he elaborated.
HOW YOU CAN APPLY:
Borrowers who believe they meet these criteria are strongly encouraged to immediately sign up for SAVE at StudentAid.gov/save
“We’re giving relief to 150,000 people today. We know there are many more people not signed up for the program who if they did sign up would meet the criteria for full forgiveness today,” Donenberg added.
