After an embattled journey toward universal student loan cancellation, the Biden administration recently announced that borrowers can now apply for what they call “the most affordable repayment plan in history.”
The Education Department this week updated their beta version of its income-driven repayment plan application on the Federal Student Aid (FSA) website, which now details the Saving on a Valuable Education, or SAVE.
The plan lowers monthly payments, provides faster forgiveness for those who qualify and does away with growing balances due to unpaid interest. This comes months after the administration initially fought for this program amid many others aimed at alleviating the nearly $2 trillion in US student loan debt after the Supreme Court struck down widespread loan cancellation.
“Some aspects of SAVE will be implemented this summer, some not until July 1, 2024,” Mark Kantrowitz, author and student loan expert, told Yahoo Finance in an interview. “In particular, the cut in the percentage of discretionary income for undergraduate debt from 10% to 5% will not be implemented until July 2024.”
What steps do you take to enroll in the new plan
Fortunately, all enrollees in the original debt cancellation plan Biden launched earlier this year, you’ll automatically be enrolled in SAVE.
If you’d like to update any information like income, contact data, amid other details, it’s best to visit the Federal Student Aid site, to make changes.
The application takes about 10 minutes to complete, per the Education Department.