WEST PLAM BEACH, Fla. — People had their first opportunity to sign up for a new income-driven repayment program called the Saving on a Valuable Education (SAVE) plan.
Since the U.S. Supreme Court struck down President Joe Biden's initial student debt relief plan, the administration has taken a number of steps aimed at helping federal student loan borrowers in other way.
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Earlier this month, the U.S. Education Department announced more than 800,000 borrowers will have their student debt wiped away. The White House says it was able to do that by reviewing accounts to see if they already qualify for aid under existing income-driven repayment plans.
The program will limit loan repayment for some people's student loans to 5% of their income, according to the Department of Education. It also stops loans from growing due to upaid interest if borrowers make their monthly payments.
The agency said a similar income-driven repayment program limit loan repayments for some people's student loans to 10%. It also increased the income level needed to make $0 payments, which is now 225% of the federal poverty line also known as $32,805 a year or $67,500 for a family of four.
Mark Kantrowitz, who studied student loans for a wide range of publications, said the new program is going to save borrowers money. He also said this action taken by the Biden administration should withstand legal challenges in court.
"The income-contingent repayment plan gives the U.S. Department of Education very broad regulatory authority," Kantrowitz said. "And that's Congress who gave them that authority."
Latisha Young said a repayment plan based on income could help borrowers like herself. She has more than $62,000 in loans, but a job change from a nurse to a flight attendant has made it more difficult to make payments.
"I feel like it’s frustrating because when you add it to your bills, your everyday bills, you always feel like you have to make a sacrifice," Young, a nurse turned flight attendant, said. "Like which one should I pick first? Like which one is more important? That is the most frustrating part and it feels like it’s never-ending."
Information about the plans can be found on the agency's website.
