Pennsylvania borrowers to receive $45.1 million in student loan forgiveness under Biden administration's SAVE Plan
PITTSBURGH (KDKA) -- The White House and the Department of Education have released new details surrounding the amount of student loan forgiveness that will be distributed here in Pennsylvania under the Biden administration's SAVE plan.
Earlier this week, the Biden administration announced $1.2 billion in forgiveness for 153,000 borrowers.
The Department of Education says that 5,600 borrowers in Pennsylvania have been approved for forgiveness under the SAVE Plan and an estimated $45.1 million will be erased -- which breaks down to around $8,000 per borrower.
"When we talk about fixing a broken student loan system, this is what we're talking about," said U.S. Secretary of Education Miguel Cardona. "The state-by-state SAVE Plan debt forgiveness numbers we're announcing today not only show that President Biden's leadership is making a real impact on people's lives in every state – they demonstrate that we won't ever stop fighting to make higher education more affordable and accessible for more Americans. This is that commitment in action. This is the real deal."
The White House and Department of Education say that loan servicers have begun processing information and borrowers will see the forgiveness applied to their accounts in the coming weeks.
Who qualifies for this new debt forgiveness?
Those who are eligible have been enrolled in repayment plans for at least 10 years and originally borrowed $12,000 or less for college, the Education Department said.
For every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments, the department added.
What is the SAVE plan?
The SAVE plan is an income-driven repayment program, or IDR, that was created by the Biden administration. IDRs link a borrower's monthly payment to their income, lowering their financial burden.
The SAVE plan was designed to fix some problems with older IDR programs, such as allowing interest to snowball on a borrower's debt.
All borrowers enrolled in SAVE can receive forgiveness after 20 years or 25 years of repayments, but the White House has developed the shorter 10-year forgiveness period for people with smaller balances.
Borrowers can apply for the SAVE plan here.
CBS News contributed to this report.
