Applications Open for New Student Loan Repayment Program

People in West Palm Beach, Florida had the opportunity to sign up for a new income-driven repayment program called the Saving on a Valuable Education (SAVE) plan. This comes after the U.S. Supreme Court struck down President Joe Biden’s initial student debt relief plan. However, the Biden administration has taken several steps to assist federal student loan borrowers in other ways.

In a recent announcement, the U.S. Education Department revealed that over 800,000 borrowers will have their student debt erased. According to the White House, this was made possible by reviewing accounts to determine if borrowers already qualify for aid under existing income-driven repayment plans.

Under the new program, loan repayment for some individuals will be limited to 5% of their income, as stated by the Department of Education. Additionally, if borrowers make their monthly payments, the program prevents loans from accruing interest. The agency also mentioned that a similar income-driven repayment program limits loan repayments to 10% for certain individuals. Furthermore, the income level required to make $0 payments has been raised to 225% of the federal poverty line, equivalent to $32,805 per year or $67,500 for a family of four.

Experts like Mark Kantrowitz, who has extensively researched student loans for various publications, believe that this new program will save borrowers money. Kantrowitz also expressed confidence that the actions taken by the Biden administration will withstand legal challenges in court.

One person affected by student loan debt, Latisha Young, believes that an income-based repayment plan could be beneficial. With over $62,000 in loans, Young’s career change from a nurse to a flight attendant has made it increasingly challenging for her to make payments. She voiced her frustrations, stating that adding loan payments to everyday bills often necessitates making sacrifices and prioritizing expenses.

To learn more about these repayment plans, individuals can visit the agency’s website. As the Biden administration continues to address the issue of student loan debt, the SAVE plan offers hope for many borrowers seeking relief and a path towards financial stability.