Student loan borrowers can now apply for the new income-driven repayment plan before payments are set to resume in October.
The plan was finalized after Biden’s initial plan for student loan forgiveness was struck down by the U.S. Supreme Court in June. The new plan could lower monthly loan payments and reduce the amount they pay back over time.
“Part of the president’s overall commitment is to improve the student loan system and reduce the burden of student loan debt on American families,” a senior administration official said, previewing the beta website first to CNN. “The SAVE plan is a big part of that. It is important in this moment as borrowers are getting ready to return to repayment.”
Enrollment is now open at https://studentaid.gov/idr/. The process takes roughly 10 minutes, and many sections can be populated automatically with existing government information.
One official says that the site can show exact monthly payment amounts, giving borrowers the power to choose the most affordable plan.
Unlike past systems, borrowers will only have to apply one time. Also, those in the current REPAYE (Revised Pay As You Go) Plan will be automatically enrolled.
From ABC 11:
The full website launch will occur in August, and applications submitted during the beta period will not need to be resubmitted. The beta period will allow the Department of Education to monitor site performance in real time to identify any issues, and the site may be paused to make any necessary updates, officials said.
The SAVE plan, which applies to current and future federal student loan borrowers, will determine payments based on income and family size, and some monthly payments will be as small as $0. The income threshold to qualify for $0 payments has been increased from 150% to 225% of federal poverty guidelines, which translates to an annual income of $32,805 for a single borrower or $67,500 for a family of four. The Education Department estimates this means more than 1 million additional borrowers will qualify for $0 payments under the plan.
Some borrowers could have their payments cut in half when the program is in full effect next year and see their remaining debt canceled after making at least 10 years of payments, a significant change from previous plans.
Read more about the plan HERE.
Biden Administration Launches Website For Revamped Income-Driven Student Loan Repayment Plan was originally published on foxync.com
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