Rep. Virginia Foxx, R-N.C., 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 enrollment by the Department of Education (DOE) following a federal court injunction against the Biden administration’s Saving on a Valuable Education (SAVE) program.
New enrollment in the Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans 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 once again.
“The Department continues to defend in court the authority to cut payments for borrowers with high debts and low incomes through the SAVE Plan,” U.S. Under Secretary of Education James Kvaal said in a statement. “In the meantime, we are making more options available to low-income borrowers, teachers, servicemembers, and other public servants so they can make the best choices for their financial situation.”
The two re-instated plans offer credit for Public Service Loan Forgiveness (PSLF) and income-driven repayment (IDR). Monthly payments are set by a borrower’s earnings, family size and allow borrowers to earn forgiveness after “extended periods of payments,” the DOE says.
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Student loan borrowers stage a rally in front of The White House to celebrate President Biden cancelling student debt and to begin the fight to cancel any remaining debt on Aug. 25, 2022 in Washington, D.C. (Paul Morigi/Getty Images for We the 45m / Getty Images)
“Many public servants use them to keep their monthly payments low as they work to earn PSLF after 10 years,” a DOE press release said.
While SAVE is tied up in court, borrowers do not owe payments on their loans and the loans are not accruing interest, but they are also not getting credit towards PSLF or making “progress toward satisfying IDR plans.”
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President Biden, right, is joined by Education Secretary Miguel Cardona as he announces new actions to protect borrowers after the Supreme Court struck down his student loan forgiveness plan in the Roosevelt Room at the White House on June 30, 2023 i (Chip Somodevilla/Getty Images / Getty Images)
The US Department of Education building is shown in Washington, D.C. (SAUL LOEB/AFP via Getty Images / Getty Images)
Borrowers in the SAVE litigation hold should not consider switching since they currently are not accruing interest, a Forbes report noted. However, borrowers closer to achieving loan forgiveness through PSLF, close to the 120 payment mark or those eligible for PSLF buyback may want to consider it, the media outlet says.
PAYE and ICR new enrollments will be open until July 1, 2027, the DOE says.
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More information for borrowers can be found on the DOE website.
