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Student loan borrowers can now apply for the Biden administration’s new loan repayment program, and the Education Department is working with a network of organizations to spread the word.
The release of the application, which launched in beta form earlier this month, comes nearly one year after President Biden announced his plans to forgive up to $20,000 in student loans for 43 million Americans. The Supreme Court struck down that plan, but Biden’s other effort to make student loan payments more affordable moved forward.
There’s no deadline for the application, but the department said in a news release that borrowers who apply for the SAVE plan in the coming days could see a new monthly payment amount by October, when the first student loan payments following the three-year pause will be due.
The administration finalized the new income-driven repayment plan, known as Saving on a Valuable Education or SAVE, at the end of June. The new plan could transform how students pay for college, depending on how many take advantage of it.
Under SAVE, a single borrower earning less than $15 an hour will not have to make any payments on their loans, and unpaid interest will be waived as part of the first round of changes that took effect July 31. Undergraduate borrowers would see their payments cut in half starting next summer, while those who borrow $12,000 or less would be eligible for forgiveness after making payments for a decade, among other changes.
“SAVE isn’t just about helping borrowers today, it’s about creating a more affordable pathway for millions of aspiring students who dream of earning college degrees and achieving the American dream—that’s exactly what the Biden-Harris Administration has fought to do since day one,” Education Secretary Miguel Cardona said in the release.
Borrowers who make more than $15 an hour would save more than $1,000 a year on their payments compared to other income-driven repayment plans, according to the release. The application should take just 10 minutes or less to complete, the department said. Borrowers also can opt to have their income shared securely from the Internal Revenue Service and automatically recertified every year.
The department and loan servicers will reach out directly to nearly 30 million borrowers to share more information about SAVE in the coming days.
To ensure more borrowers know about the plan and their repayment options, the Biden administration is launching an outreach campaign, Save on Student Debt, in collaboration with Civic Nation, the National Association for the Advancement of Colored People, the National Urban League, Rise, the Student Debt Crisis Center, UnidosUS and Young Invincibles.
For more information, go to SaveOnStudentDebt.org.
