Last Updated: July 31, 2023, 10:25 IST
Washington D.C., United States of America (USA)
File Photo of U.S. President Joe Biden. (Reuters via third party)
The Biden administration launches a beta website for the SAVE student loan repayment plan, aiming to ease the burden of student loan debt on borrowers
The US federal government is set to launch a beta website for its income-driven student loan repayment plan, allowing borrowers to submit applications as federal student loan payments are scheduled to resume in October. A Biden administration official said this initiative is part of the US President’s commitment to improve the student loan system and reduce debt burdens on American families, CNN reported.
The “Saving on a Valuable Education” (SAVE) plan was finalised after the apex country in the country rejected Biden’s student debt forgiveness initiative, in a widely debated ruling in June.
It represents a significant overhaul to the federal student loan system, potentially reducing monthly payments and total repayment amounts for some borrowers. The plan could play a crucial role in achieving that goal as borrowers prepare to resume repayment.
Federal student loan borrowers in the country will be able to access the beta website at studentaid.gov/idr. The enrollment process is expected to take approximately 10 minutes and will help borrowers get a reasonable repayment plan.
“We will show borrowers their exact monthly payment and offer the most affordable repayment plan,” said the Biden official.
Unlike past systems requiring yearly applications, borrowers will only need to apply once, making the plan much more user-friendly, according to CNN. A confirmation email will be sent upon submission, and the approval process, trackable online, is expected to take a few weeks.
Those already enrolled in the federal government’s “Revised Pay As You Earn” (REPAYE) income-driven repayment plan will be automatically switched to the new SAVE plan.
The full website launch is scheduled for August, and applications submitted during the beta period will not require resubmission. The US Education Department estimates that more than 1 million additional borrowers will now qualify for 0-dollar payments under this plan.
As per CNN report, some borrowers could see their payments halved and have their remaining debt canceled after making at least 10 years of payments.
With the new plan, borrowers who make their full monthly payments will not accrue unpaid interest. This plan is expected to alleviate financial strain for many borrowers and provide a smoother pathway to managing student loan debt, the report added.
