Biden’s Latest Initiative: A Breakdown of the New Student Debt Repayment Plan

After the conservative majority in the U.S. Senate, the Biden administration published the beta website for its new student loan repayment plan. In June, the Supreme Court invalidated the president’s plan to

After the conservative majority in the U.S., the Biden administration released the beta version of their new student debt repayment plan’s website to the Senate. (Photo: Yahoo! News)

New Student Debt Repayment Plan

A report from CNN said that the Saving on a Valuable Education (SAVE) plan is an income-driven repayment scheme that could result in reduced monthly payments and a shorter overall payback period for some debtors. Two months before the start of the new round of federal student loan payments in October, in August, the complete website is scheduled to go live.

According to a senior administration source, the president has made it a priority to reform the student loan system and lessen the financial burden that student loan debt places on American families. A sizable portion of that is the SAVE plan. At this time, when borrowers are preparing to resume repayment, it is crucial.

Payments under the SAVE plan are dependent on family size and income. Borrowers who earn less than $67,500 for a family of four or $32,805 for single-person households may be eligible for no payments.

READ ALSO: New Student Debt Repayment Plan Intends To Cut Loan Balances To As Low As $0

New Student Debt Repayment Plan Features

During the beta testing phase, the application process, which takes around 10 minutes, is available. An online-tracking process for approval can take a few weeks. Applicants who submit their applications before the official launch won’t need to do so again. Contrary to previous systems, borrowers are not required to reapply every year.

Due to the financial challenges that borrowers experienced during the COVID-19 pandemic, student loan repayments were put on hold. Many people had thought that President Joe Biden’s proposal to forgive student loan debt up to $20,000 would stand up to examination from the high court.

To maintain the president’s campaign pledge to address the student debt crisis, the administration was forced by the court’s decision to choose a new course of action.

An official from the Biden administration told CNN that earlier income-driven repayment systems, like the SAVE plan, have withstood legal challenges, reports from BET. 

READ ALSO: New Student Debt Repayment Plan SAVE Launches Beta Website For Applications