How to apply for the new student loan repayment plan
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President Biden's new income-driven repayment plan launched in August as payments are set to resume after a years-long pandemic pause.
Why it matters: The Saving on a Valuable Education (SAVE) plan comes as the administration has proposed new debt alleviation options in the months since the Supreme Court torpedoed its historic relief program.
- The new IDR plan is expected to help more than 20 million borrowers, per the administration.
- Borrowers who enrolled in the days after the program was announced were expected to qualify when payments resume in October.
How it works: SAVE is an income-driven repayment plan.
- Payments are calculated based on a borrower's income and family size, not loan balances.
- Remaining balances are forgiven after a certain number of years.
Details: Borrowers can sign up on StudentAid.gov/SAVE. The Department of Education and loan servicers will reach out directly to about 30 million borrowers.
- Payments will restart in October, after a pause in response to the COVID-19 pandemic.
- Borrowers already signed up for the pre-existing Revised Pay-As-You-Earn (REPAYE) plan will be automatically enrolled in the SAVE plan.
- People won't have to re-certify once they're enrolled.
By the numbers: Borrowers with annual income less than $30,000 will have a $0 monthly payment until their income increases.
- Borrowers with a higher income may also have a $0 monthly payment depending on their family size.
- The typical borrower will save about $1,000 per year through this plan, the White House said.
Flashback: The Biden administration forgave $39 billion of student loan debt in July for 804,000 borrowers.
- This plan was upheld by a judge in August after a lawsuit from conservative groups attempted to block the relief.
What's next: Starting next summer, payments via SAVE will be cut in half (reduced from 10% of income to 5% of income).
- Also next year, borrowers will receive credit toward forgiveness for certain periods of deferment and forbearance.
Go deeper: Who owes the most in federal student loans
