MN Student Loan Borrowers Could Get Email Saying Debt Is Erased

MINNESOTA — Some Minnesota borrowers may be among 153,000 eligible for a share of $1.2 billion in student loan debt relief under a plan announced Wednesday by the Education Department.

Eligible borrowers will begin receiving emails Wednesday from President Joe Biden and don’t need to take any action to receive the relief, the Education Department said.

Borrowers eligible for federal student loan forgiveness are those enrolled in the SAVE (Saving on a Valuable Education) Plan who have been repaying their loans for at least a decade and who originally took out $12,000 or less in loans. Most income-driven repayment plans don’t forgive debt until the borrower has made 20 or 25 years of payments.

In the first two weeks of SAVE program late last summer, some 73,900 Minnesota borrowers were among about 4 million enrolling in the plan, which offers some of the most lenient terms ever for debt repayment. About 7.5 million people have now enrolled, about 4.3 million of whom have no monthly student loan payments. More information on student loans eligible for forgiveness is available online.

The income-driven plan, which ties monthly payments to how much borrowers earn, could ultimately lower monthly payments for about 20 million borrowers.

Announced in 2022, the SAVE plan was mostly overshadowed by President Joe Biden’s broader forgiveness plan that was struck down by the U.S. Supreme Court.

Borrowers enrolled in the SAVE Plan don’t see interest continue to accrue as long as they make regular payments. The SAVE plan was developed in response to criticism that other plans allowed interest to pile up.

The Biden administration said in January it was implementing the SAVE Plan about six months ahead of schedule.

“With today’s announcement, we are once again sending a clear message to borrowers who had low balances: if you’ve been paying for a decade, you’ve done your part, and you deserve relief,” U.S. Secretary of Education Miguel Cardona said in a statement.

The Congressional Budget Office estimated the cost of the SAVE plan from 2023-2033 at about $156 billion.

Through other programs, including those forgiving loans for public service employees and improving income-driven repayment plans, the Biden administration said Wednesday that it has now canceled $138 billion in debt owed by about 3.9 million borrowers.