New Student Debt Repayment Plan SAVE To Lower Monthly Payments, Cancel Loan Balances

Student borrowers will be able to enroll in a new student debt repayment plan once the payments resume in October. The SAVE intends to cut monthly payments in half and cancel loan balances after 10 years of payments.

After the Supreme Court blocked U.S. President Joe Biden’s student loan forgiveness plan last June, a new federal student loan system is being put forward. Once the payments for student loans resume in October after being paused for years due to the COVID-19 pandemic, student borrowers will be able to enroll in a new student debt repayment plan.

According to Lobosco, the SAVE (Saving on a Valuable Education) is a new student debt repayment plan that will be fully developed in 2024. This new student debt repayment plan intends to cut the student borrower’s monthly payments in half and cancel their loan balances after making at least ten years of payments.

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New Student Debt Repayment Plan

According to Binkley, unlike the student loan forgiveness plan, the new student debt repayment plan will provide benefits for both current and future student borrowers who enroll in the program. Nonetheless, the benefits will vary depending on how many borrowers will end up enrolling. Reports say the estimation varies from $138 billion to $361 billion for over ten years. In comparison to the student loan forgiveness plan, the program was expected to cost around $400 billion.

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