After a three-year-long pause, federal student loan payments are slated to resume, much to many cash-strapped Americans’ chagrin. Fortunately, the Biden administration is aiming to help alleviate the financial strain with their new repayment plan SAVE, including a one-year grace period for borrowers.
Launched earlier this summer, the Saving on a Valuable Education updated its terms to Federal Student Aid (FSA) website to now include lower monthly payment options, 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.
This grace period means missed payments wont’ reported to credit bureaus, which will help borrowers maintain their credit scores.
“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.”
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.