After a highly publicized Supreme Court ruling struck down the original student loan forgiveness program instituted by the Biden Administration, a new income repayment system is set to replace the current forms of income-driven repayment plans (IDR) for federal loan holders. The new plan could potentially save borrowers thousands in payments.
According to the White House announcement for the program, the Saving on a Valuable Education (SAVE) plan is a new form of IDR that “calculates payments based on a borrower’s income and family size — not their loan balance — and forgives remaining balances after a certain number of years.”
To qualify for the program, borrowers must make less than $32,800 in individual income as of August 2023. The income limits are dependent on your status and your household or family size.
If you recently applied or are already on the existing Revised Pay As You Earn plan, then you will be automatically enrolled in the new SAVE plan. Most federal loan borrowers qualify for this new program.
Borrowers now have the option to avoid loan payments and receive forgiveness, in some cases, ahead of schedule. Furthermore, the government has introduced a new policy under the SAVE plan where borrowers are not charged monthly interest on outstanding balances, resulting in significant cost savings for borrowers.
The Department of Education has estimated that the new SAVE plan will see Hispanic borrowers have their total lifetime payments per dollar borrowed cut in half, while typical four-year college graduates are estimated to save over $2,000 a year.
When applying for financial aid, don’t forget about UTSA’s One Stop Enrollment Center. One Stop can help you with applying for aid, understanding the types of aid available and receiving your offered funds. Not sure when your aid will be applied to your bill or what options you have? One Stop has got your back.
Students can visit studentaid.gov/save for more information or to apply for the plan.
