(LibertySociety.com) – President Biden and the Department of Education (DOE) have been exploring all options to make student loan repayment more affordable for borrowers since Biden’s student debt cancellation was struck down by the Supreme Court in June. While income-driven repayment plans have been available for many years, Biden’s new Saving on A Valuable Education (SAVE) plan aims to go further. Loan repayments have been paused since shortly after the pandemic began in 2020 but will resume in October. Borrowers will have another year before being affected financially if they are unable to resume payments.
The SAVE plan website has been in beta testing for the past month to ensure proper functionality before the public announcement of the program. Borrowers can now go to the government’s student aid website to apply for enrollment in the SAVE plan, with an option to have their tax returns transferred from the IRS. If the borrower is already on the most recent income-driven repayment plan REPAYE, they do not need to apply for the SAVE plan. Their accounts, along with borrowers who have missed a specific number of payments, will automatically be enrolled in the new plan.
The Biden administration and the DOE will be working to inform borrowers about the option to enroll in the plan. They will work with other organizations during a September campaign to spread the word about the SAVE plan on social media, over the phone, and at town hall events. The implementation of the program will be broken into two phases, with many aspects going into effect before the end of the year. Borrowers could have their payments dropped down to $0 a month if they make less than 225 percent above the poverty level, which is an increase of 75 percent from the previous level. The single and joint income guidelines were also increased, which will reportedly allow nearly 1 million borrowers to have their payments slashed to $0. Married borrowers will also be allowed to only include their personal income if they file their taxes separately. Additionally, borrowers who are current on their payments will not see unpaid interest increases if enrolled in the SAVE plan.
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