Student loan forgiveness: Dept. of Education's SAVE Plan could lower payments, forgive loans

CHICAGO -- Student loan borrowers could be missing out on a break through the Department of Education's Saving on a Valuable Education, or SAVE, plan.

Federal officials said millions of people are already lowering their monthly student loan payments because of the SAVE Plan, and now more people could qualify for new loan savings or forgiveness.

"I have both loans for my graduate and undergraduate degree but if it can help me lower my payment that would be helpful," said borrower Peace Odili.

The Department of Education said more people like Odili could be eligible for early loan forgiveness if they try to qualify for the SAVE plan.

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"This has already resulted in approval of $1.2 billion in automatic loan forgiveness for about a 153,000 borrowers," said Richard Cordray, Chief Operating Officer of Federal Student Aid. "We think there's considerably more borrowers who qualify for this program across the country. The thing to do is to go to StudentAid.gov/SAVE for details about early forgiveness and to apply for the SAVE Plan and see if you are one of them."

The Department of Education says 5,600 borrowers in Illinois have already received relief, and it was recently announced that the SAVE Plan will now also give people who originally borrowed $12,000 or less forgiveness after as few as 10 years of monthly payments.

"They may be able to get their loans entirely forgiven," Cordray said.

For every $1,000 borrowed above $12,000, you can receive forgiveness after an additional year of payments. Even if you don't qualify for forgiveness, you could qualify for other savings.

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"It may be a reason you can get your payments lowered per month, which is good for everybody; keeps more money in your pocket," Cordray said.

"Especially considering the job market right now the job security is not great; it's not going to be easy and on top of that I am also looking at higher education which exponentially increases tuition," said David Raslina, a finance major at DePaul University.

"It is very strenuous for a lot of people and finding resources like this to help us pay for it would be helpful," Odili said.

The Department of Education said the SAVE Plan is already helping almost 4 million borrowers.

Last week, a group of Republican-led states sued the Biden administration to stop the SAVE Plan, saying it's no different from Biden's loan cancelation plan that was rejected by the Supreme Court last year.

You can see if you qualify for eventual forgiveness or lower payments by visiting StudentAid.gov/SAVE