President Biden’s administration launched a beta app for your new payment plan for student loan borrowers.
the payment plan Saving on a Valuable Education, (SAVE), is based on the lender’s incomewith which it is possible cut monthly payments in half of many borrowers and will even leave some people without a monthly bill.
The US Department of Education says borrowers can start enrolling now in what it calls “the most affordable repayment plan to date.”
How does the SAVE student loan plan work?
Instead of paying 10% of your discretionary income per month for your undergraduate student debt under the Revised Pay As You Earn Repayment Plan (REPAYED)borrowers -eventually- will have to pay only 5% under the SAVE plan.
Those who earn less than $15 an hour will not need to make any payments under the new option, the Department of Education says.
Jacqueline Mata from CNBC en Español, explains the benefits.
“SAVE is very generous to borrowers, almost like a grant,” said higher education expert Mark Kantrowitz.
Some of these SAVE plan benefits, including the change from 10% of discretionary income to 5%, will only take effect until next summer, due to the timing of regulatory changes.
Still, the Department of Education says borrowers who sign up for the plan this summer will have your application processed before student loan payments resume in October.
Borrowers who sign up during the beta application period won’t have to sign up again later, Kantrowitz said.
How to apply for SAVE and what information do you need?
You can apply for help from the SAVE plan directly at the Department of Education website. According to the US Department of Education, the request can be made within 10 minutes.
You usually need to provide your Federal Student Aid ID (FAFSA) as well as financial and contact information.
More help on the way as payments return
Due to a pandemic-era relief policy, student loan bills have been on hiatus since March 2020.
After what Supreme Court will reject President Joe Biden’s sweeping forgiveness planthe president announced a series of other relief measures for borrowers.
There will be a 12-month period after payments resume during which borrowers will not face the most severe consequences for non-paymentsincluding negative credit reports and collection activity.
Biden also said that his administration would try to cancel student debt based on a different law.
This article It was originally published in English by Annie Nova for our sister network CNBC.com. for more than CNBC enter here.
