Over 4 millions of college borrowers enrolled in the new SAVE plan
Over 4 million borrowers enrolled in Biden’s new income driven repayment plan
In an recent article published by ScrippsNews, more than 4 million borrowers have enrolled in the SAVE Plan to pay back their student loans, according to a Tuesday release from the Department of Education.
The SAVE Plan is an income-driven repayment plan. Borrowers who make more than about $15 an hour and enrolled in the income-driven repayment plan are expected to save about $1,000 more a year compared to other income-based repayment options.
In the new income-driven repayment plan, borrowers who make less than the $15 an hour threshold won’t have to make payments on their debt. As long as the borrowers make their monthly payments, they won’t be charged additional interest on their outstanding principal of the new income-driven repayment plan.
Under the new income-driven repayment plan, the IRS can access borrower accounts directly, which means applicants won’t have to renew or reapply for their income-driven repayment plan every year.
Federal Student Aid Chief Operating Officer Richard Cordray said that the new income-driven repayment plan application is easy and quick. Most people only need about 10 minutes to complete it. In the income-driven repayment plan, borrowers can get their monthly payment calculated in real time, and they can choose to have their IDR application re-certified automatically each year.
The Department of Education says it’s invited almost 30 million borrowers to apply with the income-driven repayment plan. More benefits are expected to start up in 2024, with the income-driven repayment plan, payments for undergraduate loans, and a program to forgive remaining balances of $12,000 or less if borrowers make 10 years of payments.