SAVE income-driven repayment plan will implement a new rule in February that cancels debt in as little as 10 years or 120 payments.Remember the fuss about student loan payments starting back up, with new repayment programs rolling out to offset the challenges? Well, a new benefit that rolled out in February provided some relief:one-time debt cancellation, a federal repayment plan was revamped with even stronger protections, like avoiding ballooning interest rates.
Before this new rule was enacted, student debt cancellation was already provided to borrowers enrolled in income-driven repayment plans like SAVE. However, complete debt cancellation would only come after 20 to 25 years for undergraduate and graduate loans, respectively. Borrowers who initially took out $12,000 or less in federal student loans will receive full debt cancellation after 10 years of making regular payments. For students who borrowed more than $12,000, for each additional $1,000 borrowed, they’ll add a year to the repayment period.