The Supreme Court struck down President Biden’s student loan forgiveness program in June. This program could have given some student loan borrowers up to $20,000 in student loan debt relief. After the ruling, the Biden administration announced a new income-driven student loan program called Saving on a Valuable Education (SAVE) Plan to make paying off student loan debt more affordable. This new plan could cut payments in half or even down to zero for those who qualify.
The purpose of an income-driven student loan program is to make paying down debt more affordable. These type of income-driven repayment (IDR) plans are offered for federal student loans. And unlike other loan repayment options, the payment amount due is based on the student loan borrower’s income and family size.
According to the Biden Administration the new SAVE plan is the “the most affordable payment plan” where:
“A single borrower who makes less than $15 an hour will not have to make any payments. Borrowers earning above that amount will save more than $1,000 a year on their payments compared to other IDR plans. Benefits from the SAVE plan will start becoming available this summer.”
U.S. Department of Education
How to Apply for the SAVE plan
Student loan borrowers can apply for the new SAVE Plan now. It usually takes 10 minutes or less to complete the application process. Please note that borrowers who are already enrolled in the Revised Pay as You Earn (REPAYE) plan will be automatically enrolled in SAVE.
Visit the Department of Education’s website at https://studentaid.gov/idr/ to apply and/or learn more about this new income-driven student loan repayment plan.
IMPORTANT NOTE: Student loan payments resume in October 2023. Due to the COVID pandemic, student loan borrowers have had payments paused since March 2020.
If you have concerns about being able to afford your federal student loan payments, you may want to consider an income-driven repayment plan. Or contact your lender to discuss your financial situation and ask about any other options available for you.
Student loan repayments will restart soon. What happens if you don’t pay?
