These discharges are for three categories of borrowers: those receiving Public Service Loan Forgiveness (PSLF); those who signed up for Saving on a Valuable Education (SAVE) Plan and who are eligible for its shortened time-to-forgiveness benefit; and those receiving forgiveness on income-driven repayment (IDR) as a result of fixes made by the Administration.
Recently, the U.S. Department of Education (Department) also announced an update on the timing of the payment count adjustment. This administrative fix ensures borrowers get credit for progress borrowers made toward IDR forgiveness and PSLF. Borrowers who would benefit from consolidating now have until June 30, 2024 to apply to consolidate. Borrowers can find out more about the payment count adjustment here.
The debt relief is broken down into the following categories:
- $5.2 billion for 66,900 borrowers through fixes to PSLF: The Administration has now approved $68 billion in forgiveness for more than 942,000 borrowers through PSLF.
- $613 million for 54,300 borrowers through the SAVE Plan: This relief will go to borrowers enrolled in the SAVE Plan who had smaller loans for their postsecondary studies. Borrowers can receive relief after at least 10 years of payments if they originally borrowed $12,000 or less. Each additional $1,000 in borrowing adds 12 more months until forgiveness. All borrowers on the SAVE Plan receive forgiveness after 20 or 25 years, depending on whether they have loans for graduate school. The benefit is based upon the original principal balance of all Federal loans borrowed to attend school, not what a borrower currently owes or the amount of an individual loan. This announcement brings total relief approved under the SAVE Plan to $5.5 billion for 414,000 borrowers.
- $1.9 billion for 39,200 borrowers through administrative adjustments to IDR payment counts. These adjustments have brought borrowers closer to forgiveness and address longstanding concerns with the misuse of forbearance by loan servicers.
As discussed in a recent report by the Council of Economic Advisers, the relief provided by these discharges and other actions taken by the Administration could boost short-term consumption and have positive effects on borrower mental health, financial security, and outcomes such as homeownership and entrepreneurship.
Borrowers have already begun receiving emails informing them of their approvals. Their relief will be processed in the following weeks.