2023-08-01 11:53:22
By Annie Nova – CNBC
The President’s Administration, Joe Biden, launched a beta app for its new payment plan aimed at those who still owe their federal student loans.
The plan SAVE (Saving on a Valuable Education) it’s an income-based repayment schedule, which could cut some borrowers’ previous monthly payments in half and leave others without a monthly bill.
The Department of Education explained that debtors can start enrolling in what it called “the most affordable payment plan yet.”
???? How does it work?
Instead of paying 10% of your discretionary income each month to pay off your college education debt, as was required under the previous plan known as REPAYEWith the new program, debtors will eventually be required to give up just 5% of their discretionary income.
[“Es desolador”: estudiantes reaccionan con indignación al fallo de la Corte Suprema contra plan de Biden para condonar la deuda estudiantil]
Under this new option, those earning less than $15 per hour will not have to make paymentsclarified the Department of Education.
“The SAVE plan is very generous to borrowers, almost like a scholarship after (the loan),” explained higher education expert Mark Kantrowitz.
Some benefits of the new plan, including the change from 10% to 5% of discretionary income, will not take effect until next summer due to the calendar of regulatory changes.
Still, the Department of Education said that applications for those who sign up for the program this summer will be processed before student loan payments resume in October.
Borrowers who sign up during the beta application will not have to do so again, Kantrowitz said.
???? How to apply?
You can register directly on the website of the Justice Department. Most applicants fill out their income-based payment plan application in 10 minutes, according to the Biden Administration.
[El Gobierno lanza un sitio web para su nuevo plan de reembolso de préstamos estudiantiles]
To do this you will need to provide your federal student aid ID, contact information, and financial information.
????Other options
Since March 2020, student loan payments have been suspended due to a relief policy from the time of the COVID-19 pandemic.
Students after graduation in May 2023. Chicago Tribune / TNS
After the Supreme Court ruled against Biden’s debt forgiveness plan, the president announced a series of relief measures for borrowers. Among them that there will be a period of 12 months, after payments resume, where people won’t face the harsh consequences of missing an installment, such as negative credit reports and collection activity.
Biden also assured that his Administration will try to forgive student debt through another law.
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