The Biden administration’s new student loan repayment plan program, known as the Saving on a Valuable Education (SAVE) plan, has a beta website that was made available by the Department of Education on Monday.
According to the department’s website, a beta version of the redesigned [income-driven repayment (IDR)] program is now accessible and offers the chance to sign up for the brand-new SAVE Plan, which is currently the most cost-effective repayment option.
Streamlining Student Loan Repayment with SAVE Plan
Prior to this, the administration offered many different IDR alternatives to borrowers, which supporters claim made the system complicated for them.
The Revised Pay As You Earn Repayment (REPAYE) plan, one of the four IDR choices that are accessible to borrowers, will be replaced by the new SAVE plan. The department will phase out or restrict the use of the other three IDR programs.
This year, the SAVE plan will differ significantly from the REPAYE option in three ways. The first increases the income exemption from 150 percent over the poverty line to 225 percent, which results in $0 monthly payments for a single person making less than $32,800 under the plan.
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Simplifying Student Loan Repayment
If a person is paying off their student loans on a monthly basis, the plan also prevents accruing interest. Last but not least, spousal income for married debtors who file separately will not be taken into account.
According to the website, which was initially made public by CNN, a demo of the application process can be seen where certain information, such as tax returns, can be automatically added because the government has it on record for a borrower.
The risk of missing their annual IDR recertification date, which has caused millions of borrowers to prolong their time toward forgiveness and accrue higher interest charges every year, will be eliminated with the new IDR auto-recertification feature.
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