An initial round of Maine borrowers has been approved for student loan forgiveness through a new federal repayment program.
About 700 Mainers will have $5.3 million in student loans forgiven in the coming weeks, the U.S. Education Department said Friday.
They’re borrowers who have been making payments on their loans for at least 10 years and took out $12,000 or less for school, and they’ve enrolled in the new Saving for a Valuable Education, or SAVE, Plan that the White House is gradually rolling out.
For others in the program, loan payments will be based on a smaller portion of a borrower’s income under the new program.
James Myall, an analyst for the Maine Center for Economic Policy, said the new program is intended to revamp a previous federal repayment loan plan that was viewed as confusing and difficult to use.
“More people who have very low incomes will have smaller payments, and some folks could have zero dollars in payments, if they’re living within a certain level of the federal poverty line,” he said.
All borrowers can receive forgiveness after 20-25 years under the new program.
Roughly 32,500 Mainers are currently enrolled in the SAVE plan, though Myall said more may be eligible.
