Biden launches student loan forgiveness site, intensifies Supreme Court battle.
The White House Launches New Student Loan Payment Initiative
The White House is taking steps to assist borrowers with their student loan payments through a new initiative called the Saving on a Valuable Education (SAVE) Plan. This income-driven repayment plan, introduced by the Biden administration, aims to provide relief to millions of borrowers. The initiative is currently in beta testing and is set to be fully launched in August.
Applying for the SAVE Plan
The White House has opened applications for the SAVE Plan, allowing borrowers to participate in the beta testing phase. By submitting an Income-Driven Repayment (IDR) application now, borrowers can help refine the processes before the official launch. It is important to note that applications may be intermittently available during this testing period. However, if the application is not accessible, applicants are encouraged to try again later. A confirmation email will be sent after the application has been submitted.
The New Approach
The SAVE Plan was introduced in response to the Supreme Court’s rejection of President Biden’s broader student loan forgiveness plan. While the previous plan aimed to eliminate up to $20,000 in student loan debt for many borrowers, the SAVE Plan takes a different approach. It adjusts monthly payments based on income and household size, allowing borrowers to repay their loans at a more manageable pace. Notably, the maximum income threshold for zero-dollar monthly payments has been raised from 150% to 225% of the poverty line.
Benefits of the SAVE Plan
The Department of Education estimates that the increased income threshold will enable an additional 1 million borrowers to qualify for zero-dollar monthly payments without facing delinquency or default. Furthermore, borrowers who consistently make their full payments each month will not accrue unpaid interest. This initiative is part of the Biden administration’s broader efforts to address the student loan crisis and provide relief to borrowers.
Alongside the SAVE Plan, the Biden administration is also working on changing the calculations for forgiveness under the Higher Education Act, aiming to alleviate $39 billion in student loan debt.
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