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Rep. Virginia Foxx, R.N.C., reacts to President Biden’s fourth attempt to cancel student loan debt on ‘The Big Money Show.’
The Department of Education (DOE) has reopened enrollment for two student loan repayment plans following a federal court order against the Biden administration’s Savings on a Valuable Education (SAVE) program.
New enrollment in the Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) plan programs stopped last summer in an attempt to phase them out and encourage borrowers to enroll in the Biden administration’s SAVE plan -Harris, but now people can register once again.
“The Department continues to defend in court the authority to cut payments to high-debt, low-income borrowers through the SAVE Plan,” U.S. Undersecretary of Education James Kvaal said in a statement. “In the meantime, we are making more options available to low-income borrowers, teachers, members of the military and other public servants so they can make the best decisions for their financial situation.”
The two reinstated plans offer credit for Public Service Loan Forgiveness (PSLF) and Income-Driven Repayment (IDR). Monthly payments are set based on the borrower’s income and family size and allow borrowers to obtain forgiveness after “extended payment periods,” the DOE says.
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Student loan borrowers stage a rally outside the White House to celebrate President Biden’s cancellation of student debt and begin the fight to cancel any remaining debt on August 25, 2022 in Washington, DC. (Paul Morigi/Getty Images for Us 45m/Getty Images)
“Many public servants use them to keep their monthly payments low while they work to earn PSLF after 10 years,” a DOE news release said.
While SAVE is stuck in court, borrowers don’t owe payments on their loans and the loans don’t earn interest, but they also aren’t getting PSLF credit or making “progress toward meeting 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 of the White House on June 30, 2023. (Chip Somodevilla/Getty Images/Getty Images)
The US Department of Education building is shown in Washington, DC (SAUL LOEB/AFP via Getty Images/Getty Images)
Borrowers in the SAVE litigation should not consider switching since they are not currently accruing interest, a Forbes Report noted. However, borrowers who are closer to achieving loan forgiveness through PSLF, near the 120 payment mark or those eligible for PSLF buyback may want to consider it, the news outlet says.
New PAYE and ICR registrations will be open until July 1, 2027, the DOE says.
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More information for borrowers can be found in the DOE website.
