In the wake of the Supreme Court decision blocking President Biden’s proposal to forgive up to $20,000 in student loans for most Americans, the administration announced new steps to aid borrowers.
The Department of Education is starting the negotiated rulemaking process, where they will bring in various parties that would be affected by regulatory changes. The parties will discuss Title IV financial aid programs. Afterwards, the department will draft a rule that could allow them to forgive loans through a different policy mechanism. The department also announced the creation of a 12 month on-ramp transition period for borrowers. During this period, borrowers will resume payments and interest will accrue, but borrowers will not be penalized for missing late or missing payments. Student loan payments are set to resume on October 1.
Additionally, the Department of Education finalized the new income-driven repayment plan. The plan, known as the Saving on a Valuable Education (SAVE) plan, will cut monthly payments to zero dollars for low-income borrowers, save all other borrowers at least $1,000 per year and curb interest rate accrual. Borrowers will be able to begin enrolling in the SAVE plan later this summer, and the department will automatically switch borrowers currently enrolled in the existing RAPYE 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.
Yeah but every time you change payment plans they capitalize the interest so you owe tens of thousands more $$. It happened to me.
Posted by: Annie | 07/13/2023 at 11:15 AM