Biden administration trials website for new student loan repayment scheme
The Joe Biden White House is launching a beta – or testing – website as part of its new income-driven student loan repayment plan, according to reports.
The site, which CNN first reported on Sunday, comes as part of the president’s Saving on a Valuable Education (Save) plan, which was announced earlier this year after the supreme court struck down an earlier iteration of Biden’s student loan forgiveness plan.
According to the website, Save can “significantly” lower monthly payment amounts as compared to other income-driven repayment plans.
“Part of the president’s overall commitment is to improve the student loan system and reduce the burden of student loan debt on American families,” a senior Biden administration official told CNN. “The Save plan is a big part of that. It is important in this moment as borrowers are getting ready to return to repayment.”
CNN reported that administration officials estimate the plan enrollment process for federal student loan borrowers takes about 10 minutes on the website. The network added that borrowers will only be required to apply once, unlike previous systems that required yearly applications.
This plan is expected to be “much easier to use”, officials told CNN.
“We will be able to show borrowers their exact monthly payment amount and give them the ability to choose the most affordable repayment plan for them,” the outlet reports one official saying.
The full website is expected to launch in August, with officials telling CNN that borrowers who submit their applications during the beta period will not be required to resubmit them.
The Save plan, which will go into full effect on 1 July 2024, increases the income exception from 150% to 225% of the poverty line. Additionally, the plan intends to cut payments on undergraduate loans in half and ensure that borrowers “never see their balance grow as long as they keep up with their required payments,” the education department said.
Moreover, a single borrower making less than $15 an hour will not be required to make any payments, it added.
The website’s unveiling comes after the supreme court in June ruled against a $430bn student debt forgiveness plan from the Biden administration which was associated with the 2003 Heroes Act.
Congress passed the Heroes Act in the aftermath of the September 11, 2001, terrorist attacks on the US. But the supreme court ruled the act did not authorize Biden’s student debt forgiveness plan, dealing a blow to up to 40 million borrowers in the US.
Biden then followed through on a promise to release a new relief plan under the Higher Education Act, which the supreme court’s ruling in June did not address.
Source: The Guardian
