WASHINGTON — The Biden administration said it will begin notifying around 153,000 borrowers on Wednesday that their student loans have been canceled as part of a new repayment plan that's taking effect nearly six months ahead of schedule.
Loan forgiveness was originally set to begin in July under the new SAVE repayment plan, but it was accelerated to provide faster relief to borrowers, President Joe Biden announced last month. It’s part of an effort “to act as quickly as possible to give more borrowers breathing room” and move on from their student debt, the Democratic president said in a statement.
Borrowers were eligible for student loan relief if they had enrolled in the new SAVE plan, if they originally borrowed $12,000 or less to attend college, and if they have made at least 10 years of payments.
In total, the Biden administration said it has now approved nearly $138 billion in debt relief for around 3.9 million Americans.
Tens of thousands of borrowers enrolled in the SAVE plan who will have their debt cancelled starting this week will receive an email Wednesday informing them of their imminent relief, the White House explained.
Next week, the Department of Education plans to reach out directly to borrowers who are eligible for early relief but not currently enrolled in the SAVE Plan to encourage them to enroll.
Those who took out more than $12,000 will be eligible for cancellation but on a longer timeline. For each $1,000 borrowed beyond $12,000, it adds an additional year of payments on top of 10 years.
The maximum repayment period is capped at 20 years for those with only undergraduate loans and 25 years for those with any graduate school loans.