President Biden’s new income-driven repayment plan launched on Tuesday. The Saving on a Valuable Education (SAVE) plan comes months after the Supreme Court struck down Biden’s student loan relief plan, as the administration has proposed new ways to alleviate the debt of tens of millions of borrowers. It is expected to help more than 20 million borrowers, per the administration.
Borrowers need to enroll in the next few days for the new monthly amount to qualify when payments resume in October.
How it works: SAVE is an income-driven repayment plan. Payments are calculated based on a borrower’s income and family size, not loan balances. Remaining balances are forgiven after a certain number of years.
Borrowers can sign up on StudentAid.gov/SAVE. The Department of Education and loan servicers will reach out directly to about 30 million borrowers.
Payments will restart in October, after a pause in response to the COVID-19 pandemic.
Borrowers already signed up for the pre-existing Revised Pay-As-You-Earn (REPAYE) plan will be automatically enrolled in the SAVE plan. People won’t have to re-certify once they’re enrolled.
Borrowers with annual income less than $30,000 will have a $0 monthly payment until their income increases.
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