July 31, 2023
If you have a federal student loan. You’re going to want to know…it’s here.
Well, the beta version is here.
But now you can now start applying for the new federal student loan — SAVE income driven repayment program!
The Department of Education released the beta version of the SAVE income driven repayment program application quietly over the weekend. The website says it’ll only take about 10 minutes to fill out the paperwork if you have all your information ready. And it says if you submit your information now, you will not have to submit it again when the official launch happens.
You may remember I told you in this video, the President announced this new SAVE income driven repayment program the same day the Supreme Court struck down his original student loan forgiveness program and he said this SAVE program would be the “the most affordable repayment plan ever created.”
So – here’s what it does. Some features of the SAVE program will roll out now and then there will be others that will roll out in 2024.
So let’s start with what’s happening now.
This summer the save program will allow some borrowers to qualify for zero-dollar monthly payments. A single borrower who makes $32,800 a year or less or $67,500 or less for a family of four — basically like minimum wage — would qualify for this zero-dollar plan. For all other borrowers you’ll save at least $1000 a year on payments. The plan also says if you make your monthly payment your loan balance won’t grow due to unpaid interest.
By 2024 the program will limit the amount a borrower has to pay per month to 5% of their discretionary income instead of the current 10%. And if you have an original federal student loan balance of less than $12,000, and you’ve made 10 years of payments…instead of the current 20 years of payments — that balance will be forgiven. For every $1000 you borrowed over $12,000, add one more year of payments before it’s forgiven. For example, if your original principal balance is $14,000 you will see forgiveness after 12-years. And by 2024 – if you consolidate your federal loan you will not lose your progress to forgiveness and you will automatically receive credit towards forgiveness for certain period of deferment or forbearance.
All federal student loan borrowers are allowed to participate in the SAVE income driven repayment program and if you are already enrolled in the REPAYE income driven repayment program – you will automatically be rolled into the SAVE program. So you do not need to fill out this application.
All you need to fill out this application is a verified FSA ID, documentation of your income, your mailing address, phone number and email address and your spouse’s information so they can calculate whether your payment should be lowered. Once you fill out the application, you will receive an email confirmation and if you are eligible for the SAVE plan your new payment amount will be available when student loan repayments start back up in the fall.
Sign up for the SAVE program here.
More info about the SAVE program here.
