Does Biden’s Recent Student Loan Forgiveness Policy Affect You?
Here’s what you need to know about the latest student loan forgiveness policy:
1. Debt Forgiveness Policy Eligibility – Enrollees in the Saving on a Valuable Education (SAVE) Plan
This debt forgiveness policy is specifically for enrollees in the SAVE plan (Saving on a Valuable Education) who borrowed less than $12,000 and have been making payments for at least ten years.
2. How Will Borrowers Know They Qualify?
Borrowers who qualify for this debt forgiveness should receive emails notifying them that they will receive debt relief through the SAVE program and do not need further action.
3. How Many Borrowers Qualify?
According to the Washington Post, about 7.5 million people out of the more than 40 million with federal student loan debt are enrolled in SAVE.
The SAVE plan was established primarily to adjust monthly student loan payments to earnings and family size.
Now, the amount of income protected from the calculation of debt payments moves from 150% to 225% of the federal poverty line.
This means that now a single borrower earning less than $15/hr will be spared from payments.
Even if the borrower’s monthly payment is zero, they will still get credit toward forgiveness.
Have additional questions or want to speak with our team directly? Contact us.
Robert Amato, CFP®, CIMA®
Principal
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