Student Loan Change Impacting Millions Sparks New Warning From Senators
Summary
The U.S. Education Department plans to end the Biden administration’s SAVE student loan repayment plan, affecting over 7 million borrowers. Borrowers will have 90 days starting in July to switch to other repayment plans, or they will be automatically placed into plans with higher monthly payments.Key Facts
- The SAVE plan was created in 2023 to make student loan payments based on income and family size, lowering many borrowers' monthly bills.
- Over 7 million people are currently enrolled in the SAVE plan.
- Borrowers must leave the SAVE plan within 90 days of notification, starting no earlier than July 1.
- Those who do not choose a new plan will be placed in the Standard Repayment Plan or a new Tiered Standard Plan, which usually costs more monthly.
- Democratic senators have warned the Education Department to slow down and provide more support to borrowers during the transition.
- The SAVE plan ended after legal challenges from Republican-led states, and the Trump administration finalized a settlement that ended the program this year.
- The end of SAVE marks a major change in student loan repayment since payments restarted after the pandemic pause.
- Some experts and senators worry that many borrowers will face higher payments that could be hard to afford.
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