A key provision of President Joe Biden’s Saving on A Valuable Education, or SAVE income-driven repayment plan, will be implemented next month, providing loan forgiveness for more borrowers, YahooFinance.com reported. This provision was not expected to take effect until July and will provide immediate debt cancellation for borrowers who have an original loan balance of $12,000 or less and have been in repayment for 10 years. "This action will particularly help community college borrowers, low-income borrowers, and those struggling to repay their loans," Biden said in a press release. One of the benefits of enrolling in an income-driven repayment (IDR) plan is that after 20 or 25 years of repayment — depending on the plan — any remaining balance is discharged. The new provision cuts that timeline to 10 years for borrowers with smaller balances. Beyond that, for every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments, which means those who originally borrowed less than $21,000 will be eligible for forgiveness faster than the 20-year timeline, James Kvaal, undersecretary of Education, said in a press call this week. "Giving borrowers with smaller loans a faster path to being debt free will help many borrowers avoid financial distress and have peace of mind," Kvaal said.
