Public Service Loan Forgiveness and the SAVE Plan: Expanded Eligibility and Reduced Forgiveness Timeframes
Revised Forgiveness Timeline for SAVE Plan Borrowers
Starting in February 2024, the time to Income-Driven Repayment (IDR) loan forgiveness for borrowers on the SAVE Plan will decrease significantly. Under the current 2025-year timeline, forgiveness will be available after 20 or 25 years, depending on whether the borrower has graduate school loans. However, the new timeline will shorten this timeframe to as few as 10 years for borrowers who originally borrowed $12,000 or less.
Key Details of the SAVE Plan
The SAVE Plan is an income-driven repayment program that provides loan forgiveness for public service workers after a certain number of years of qualifying employment. The program is available to borrowers with federal student loans who work full-time in a public service job, such as teaching, nursing, or social work.
Under the original SAVE Plan rules, borrowers had to make qualifying loan payments for 20 or 25 years before receiving loan forgiveness. However, the revised timeline for borrowers on the SAVE Plan will reduce these timelines to as few as 10 years for low-balance borrowers.
Eligibility for Public Service Loan Forgiveness
In addition to the SAVE Plan, borrowers who work in public service may also be eligible for Public Service Loan Forgiveness (PSLF). PSLF provides loan forgiveness after 10 years of qualifying employment for borrowers who meet certain requirements, such as making 120 on-time loan payments.
The recent changes to the SAVE Plan and the expansion of PSLF eligibility provide significant benefits for public service workers seeking student loan forgiveness. Borrowers who are unsure of their eligibility for these programs are encouraged to contact their loan servicer for more information.
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