Student Loan Update: Senator Urges Change Impacting Hundreds of Thousands
Summary
Senator Kirsten Gillibrand is urging federal officials to help borrowers affected by the end of the SAVE student loan repayment plan. The plan, introduced in 2023, lowered monthly payments for millions, but a court ruling forced its end, leaving many borrowers facing higher payments and uncertainty.Key Facts
- The SAVE plan cut student loan payments to as low as 5% of income or even zero for some low earners.
- SAVE offered interest subsidies and faster loan forgiveness for borrowers with smaller balances.
- A federal appeals court ended the SAVE plan after lawsuits from Republican-led states.
- Over 7 million borrowers are now required to leave the SAVE plan and select a new repayment option.
- Borrowers have 90 days from July 1 to choose a new repayment plan or will be placed in a standard plan.
- Senator Gillibrand wants borrowers to keep credit for time spent in SAVE’s forbearance period and avoid sudden payment increases.
- Critics say borrowers made financial choices based on the SAVE plan being permanent, now disrupted by its end.
- Other repayment options include Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR).
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