Rep. Virginia Foxx, R-Ky., reacts to President Biden’s fourth attempt to cancel student loan debt on “The Big Money Show.”
Two student loan repayment plans have been reopened for registration by the Department of Education (DOE) after a federal court injunction against… Biden administration Savings in Value Education (SAVE) program.
New enrollment in the Pay-as-You-Earn (PAYE) and Income Contingent Repayment (ICR) programs was halted last summer in an attempt to phase them out and encourage borrowers to sign up for the Biden-Harris administration’s SAVE plan, but now people can sign up again.
“The Department continues to defend in court the authority to reduce payments for high-debt, low-income borrowers through the SAVE Plan.” Undersecretary of the Ministry of Education James Kvale said in a statement. “In the meantime, we are making more choices available to low-income borrowers, teachers, service members and other public employees so they can make the best choices for their financial situation.”
The two reactivated plans provide credit for Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR). The DOE says monthly payments are determined by borrower income and family size and allow borrowers to obtain forgiveness after “extended periods of payment.”
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Student loan borrowers march in front of the White House to celebrate President Biden canceling student debt and starting the fight to cancel any remaining debt on August 25, 2022 in Washington, D.C. (Paul Morigi/Getty Images for We the 45m/Getty Images)
“Many public service employees use it to keep their monthly payments low as they work to earn PSLF after 10 years,” a DOE press release said.
While saving bound in court, Borrowers do not owe payments on their loans and do not accrue interest on the loans, but they also do not obtain credit toward PSLF or make “progress toward meeting IDR plans.”
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Education Secretary Miguel Cardona joins President Biden, right, as he announces new measures to protect borrowers after the Supreme Court struck down the student loan forgiveness plan in the Roosevelt Room of the White House on June 30, 2023. (Chip Somodevila/Getty Images/Getty Images)
The US Department of Education building is on display in Washington, DC (Sol Loeb/AFP via Getty Images/Getty Images)
Borrowers subject to the SAVE litigation moratorium should not consider switching because they are not currently accruing interest; Forbes report noted. However, borrowers who are closer to achieving loan forgiveness through PSLF, near the 120 repayment mark or those who qualify for a PSLF buyback may want to consider it, media say.
New PAYE and ICR enrollments will be open until July 1, 2027, the Department of Energy says.
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More information for borrowers can be found at Ministry of Energy website.
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