The Supreme Court struck down Biden’s student loan forgiveness program, but relief may be on the horizon for qualified borrowers:
- Biden has launched an income-driven repayment plan that borrowers can begin submitting applications for. The full website will launch in August. The new SAVE plan will replace the Revised Pay As You Earn plan.
- The SAVE Plan is an overhauled income-driven repayment plan that can lower monthly payments to zero, and cancel remaining debt after ten years.
- The SAVE plan will recalculate the borrower’s discretionary income relative to 225% of the poverty level, whereas the old plan calculated to 11% of the poverty level. This will result in lower payments for borrowers:
- Unpaid interest will not accrue as long as full monthly payments are being made.
- Borrowers need to have federally held student loans to be considered eligible – this includes both subsidized and unsubsidized loans. Private loans are not eligible.
- Married borrowers filing taxes separately will not need to include their spouse’s income in in their payment calculation.
There are other changes set to take effect in 2024. Please reach out to us if you have any questions or would like more information.
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