Under the Biden administration's revised plans, student loan borrowers in the SAVE income-driven repayment plan will see smaller required payments.Borrowers who aren’t eligible for a $0 payment would save "at least $1,000 a year compared to the current REPAYE plan," according to the Dept. of Education. The agency says a single borrower would save $91 a month, or $1,080 per year, while a family of four would save $187 monthly and $2,244 per year.
It will also stop requiring married borrowers who file separate tax returns from including their spouse’s income or their family size in their payment calculation under the SAVE plan. When the SAVE plan is fully implemented in July 2024 several other changes will take effect – including a reduction in payments on undergraduate loans from 10% to 5% of incomes above 225% of the federal poverty line.
Borrowers who originally had smaller balances – defined by the agency as $12,000 or less – will be eligible for forgiveness of their remaining balances after 120 payments, or the equivalent of 10 years in repayment. An additional 12 payments will be added to that figure for each additional $1,000 borrowed above that level up to a maximum of 20 years for undergraduate loans and 25 years for graduate loans.
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