President Biden officially launched a new income-driven student repayment plan this month in a move to help alleviate repayment concerns for millions of borrowers. This occurred just weeks after the administration’s attempts at universal student loan forgiveness have stalled in the Supreme Court.
The Saving on a Valuable Education (SAVE) plan will base monthly payments on family size and income of the borrower, which could reduce payments to almost $0 a month. Borrowers who fall behind on their payments will be automatically placed in the program.
Payments were originally paused in March of 2020 as a response to the COVID-19 pandemic. Interest on student loans was also paused. Payments are now set to resume in October.
Many borrowers are nervous. According to a survey conducted by the U.S. News & World Report, 85% of borrowers believe they’ll financially struggle when payments return.
To determine eligibility for the SAVE plan, borrowers can use the student loan simulator tool at studentaid.gov.