🎙️ Podcast Show Notes: Faster Student Loan Forgiveness and Lower Payments Under Biden’s SAVE Plan 🎙️

Episode Highlights:

  1  Introducing the SAVE Plan:

  ◦  President Joe Biden debuted the SAVE plan last fall, hailed as the most affordable and beneficial income-driven repayment plan.

  ◦  Key features include lower monthly payments, an interest subsidy to prevent balance increases, and accelerated forgiveness for small debt amounts.

  2  Major Updates Effective July 1:

  ◦  New repayment formula slashes monthly payments for undergraduate borrowers by half, reducing the discretionary income formula from 10% to 5%.

  ◦  Graduate loan borrowers with undergraduate debt will also see payment reductions proportional to their combined debt.

  3  Student Loan Payments Paused for July:

  ◦  Over 8 million borrowers enrolled in SAVE will have payments recalculated.

  ◦  To avoid chaos, the Education Department has placed impacted borrowers in administrative forbearance for July, cancelling any due payments.

  4  Forbearance Notices and Interest Rate Benefits:

  ◦  Borrowers are receiving notices about the administrative forbearance from July 1 to July 31.

  ◦  No payments required and interest rates temporarily set to 0%.

  5  Forbearance Counts Toward Forgiveness:

  ◦  New regulations allow mandatory processing forbearances to count toward forgiveness for IDR plans and PSLF, a significant change from past practices.

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