The Biden administration recently announced a new repayment program called the Saving on a Valuable Education, or SAVE, plan, which aims to provide federal student loan debt forgiveness to borrowers who have spent a decade in repayment. Unlike the typical requirement of making payments for 20 or 25 years on an income-driven repayment plan, the SAVE plan allows borrowers who took out $12,000 or less to have their debt erased after just 10 years.

To be eligible for debt forgiveness under the SAVE plan, borrowers must have eligible federal student loans and be enrolled in the program. It is important to note that the pandemic-era policy suspending federal student loan payments also counts towards a borrower’s forgiveness timeline, regardless of whether or not payments were made. This means that borrowers who qualify for forgiveness after 10 years will have more than a third of their qualifying payments covered under the payment pause.

The U.S. Department of Education offers various options for borrowers to pause their loan payments. However, it is crucial to understand that due to the timeline of regulatory changes, some of these periods may only start counting towards forgiveness after July. For example, forbearances can qualify towards forgiveness if a borrower has either 12 consecutive months in a forbearance or 36 cumulative months. Additionally, time spent in economic hardship deferment or other deferments, such as those for cancer or unemployment, may also count towards forgiveness, depending on when the borrower was enrolled.

The Department of Education has mentioned the possibility of borrowers making “buyback” payments in the future to receive credit for periods in deferments or forbearances that did not count towards forgiveness. However, this option is not yet available. In the event that a borrower’s calculated payment under the SAVE plan is currently $0, the cost for buyback will be zero, allowing them to have all other deferments and forbearances covered at no additional cost.

Higher education expert Mark Kantrowitz suggests that borrowers take advantage of the benefits offered by the SAVE plan. He emphasizes that if a borrower’s calculated payment under the plan is currently $0, they can benefit from the buyback option with no additional cost. This allows borrowers to have all deferments and forbearances covered without any financial burden.

The introduction of the SAVE plan by the Biden administration provides a significant opportunity for eligible student loan borrowers to have their federal student loan debt forgiven after just 10 years of repayment. By understanding the timeline considerations, including the eligibility of certain periods towards forgiveness and the potential for buyback payments in the future, borrowers can make informed decisions about their student loan debt. It is important for borrowers to stay updated on any further developments and take advantage of the benefits available to them under the SAVE plan.


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