Current Events > Biden's Plan for Student Loans

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https://www.politico.com/news/2023/07/05/inside-joe-bidens-new-student-loan-repayment-plan-00104723

"Alongside his pledge to start over on a plan to cancel student debt, President Joe Biden last week unveiled the final details of his separate student loan repayment program. The program, which has been in the works for more than a year, will permanently reshape how borrowers repay their federal student loans. Heres our quick guide to Bidens new SAVE plan for student loan repayment:

Whats in the plan
The finalized income-driven repayment program is largely unchanged from the initial proposal the administration unveiled in January. Many borrowers would face lower monthly payments, the department will curb interest accrual, and borrowers with relatively smaller balances could see loan forgiveness more quickly.

Whats not in the plan
The administration rejected calls to lower the monthly payment amount (5 percent of income) for graduate borrowers, keeping the benefit only for undergraduate borrowers. And the administration didnt budge on Parent PLUS borrowers, who remain excluded from the new program.

The finalized income-driven repayment program is largely unchanged from the initial proposal the administration unveiled in January. Many borrowers would face lower monthly payments, the department will curb interest accrual, and borrowers with relatively smaller balances could see loan forgiveness more quickly.
Whats not in the plan
The administration rejected calls to lower the monthly payment amount (5 percent of income) for graduate borrowers, keeping the benefit only for undergraduate borrowers. And the administration didnt budge on Parent PLUS borrowers, who remain excluded from the new program.

Phased implementation
A key feature of the plan that Biden touted on Friday cutting payments for undergraduate borrowers in half wont be available to borrowers for another year, in July 2024. Thats because the administration is implementing the new program in phases. Heres how the Education Department says itll work:

Sign-ups start soon
The department says that later this summer borrowers will be able to begin enrolling in the SAVE plan. It plans to automatically switch borrowers currently enrolled in the existing REPAYE plan to SAVE at that time. The department says that borrowers who apply for one of those plans this summer will have their applications processed in time for their first payment due dates that begin in October.

The price tag
The Biden administration estimates that its new, more generous income-driven repayment plan will cost $156 billion over the next decade, though that figure assumed the Supreme Court would allow student debt cancellation. The estimate is slightly higher than the administrations initial analysis but still significantly lower than many outside analyses, including a projection by the Congressional Budget Office."

Biden has laid out his plan for student loans.