Student loan borrowers in SAVE plan told to prepare for repayment: What to know
Trump makes student loan forgiveness changes
Tim Phillips, Nestpoint Director of Government Affairs & Global Strategies weighs in on the new landscape for student loan repayment.
More than 7 million student loan borrowers who signed up for the Biden-era SAVE plan to repay their debt must find a new plan for repayment, the Education Department announced Friday.
The news from the Education Department comes after a federal court struck down the SAVE plan earlier this month.
SAVE plan ending
Timeline:
Loan servicers will issue notices to SAVE plan enrollees starting July 1, giving them 90 days to select a new repayment plan. Borrowers will be contacted by their loan servicers in stages, with a new group getting notified every two weeks. Those enrolled in the SAVE plan the longest will be the first to receive notices.
RELATED: Treasury Department taking over student loans: What to know
What they're saying:
"The days of unlawful loan forgiveness are behind us," Under Secretary of Education Nicholas Kent told The Associated Press. "Let me be clear, the Trump administration’s perspective is that when a student takes out a loan, they are responsible for repaying it."
Why you should care:
The available repayment plans will mean higher monthly payments for most of those borrowers.
(Getty Images)
‘No good options’
The other side:
Critics of the changes say higher payments will only exacerbate the rising "affordability crisis" and force students into repayment plans with "no good options."
RELATED: Trump administration delays plan to withhold pay for borrowers in default
"Over and over again, education officials of both parties made promises about fixing the broken student loan system and called student debt a crisis," Mike Pierce, executive director of the Student Borrower Protection Center, said. "And yet today, these same borrowers are being told it’s time to pay and you have no good options."
"You’re talking about a pressing current affordability crisis, and you took away the most affordable plan option," Alexander Lundrigan, policy and advocacy manager at Young Invincibles, an advocacy group, told the AP.
What is the SAVE plan?
The backstory:
The SAVE plan was among several initiatives launched by President Joe Biden to reduce Americans’ student debt burden.
By the numbers:
The SAVE plan provided more lenient terms than other repayment plans, reducing loan payments to as little as 5% of a borrower’s discretionary income and offering forgiveness for borrowers who made payments for at least 10 years and originally borrowed $12,000 or less. The most forgiving income-based repayment plan now is calculated off at least 10% of an individual’s discretionary income.
SAVE plan enrollees haven’t had to make payments while the court challenges were pending. But debt balances began accruing interest following a court ruling last summer, which means some students will owe more when they resume payments.
Other changes to student loan repayment
Dig deeper:
Last year, the Trump administration and Congress made several changes to student loan repayment options that will take effect over the next two years. For one, new student loans will no longer have the option of deferment because of unemployment or economic hardship.
The Source: This article includes information from The Associated Press and previous FOX Local reporting.
Deputies engage in standoff at Seville home, officials say
Deputies were seen in the area of Lake Juanita Road and Raulerson Road.
Sophie Cunningham talks with Cheryl Reeve after comments on trans athletes
Cheryl Reeve and Sophie Cunningham had a mid-court chat on Sunday before the Minnesota Lynx took on the Indiana Fever, one day after Reeve had some strong words for Cunningham's comments on transgender athletes.
Volusia officials respond to scene in Seville
FOX 35's Stephanie Buffamonte was on scene as many officials responded to the Seville area
DeLand shooting update: Search warrant executed on Loughton Street in teen murder investigation
DeLand police, the FBI and Volusia Sheriff's SWAT team executed a search warrant at a Loughton Street home Saturday night regarding the recent double homicide of two teenagers.
Lake Mary Little League girl's softball wins World Series opener 14-0
Lake Mary Little League girl's softball supporters gathered at 4th Street Bar & Grill to cheer the girl in the world series watch party of game one of the World Series.
Police execute search warrant in DeLand home after 2 men shot, killed
On Aug. 1, around 10:30 p.m., officers served a search warrant at a home on Loughton Street in DeLand in connection to the double homicide of Dustin Rose, 19, and Sampson Campbell, 18. Days after their death, police vow to not stop until the person responsible is brought to justice, the department said.
Orlando weather: Rain clears up for work week
Showers and storms will continue through the rest of the evening with lingering showers on Sunday night. A ridge of high pressure to settle in over Florida the end of next week which will heat things back up.
Idaho In-N-Out shooting leaves 3 dead: What we know about the suspected gunman
Police have identified the gunman in the deadly shooting at a newly opened In-N-Out Burger in Twin Falls, Idaho, as 24-year-old Chad Williams.
Used SpaceX rocket will soon slam into the moon, but not on purpose
A large piece of a SpaceX rocket appears to be on an unintentional collision course with the moon.
Capital One says Trump Organization bank accounts closed after money laundering probe
Capital One says it closed hundreds of bank accounts tied to the Trump Organization after an “anti-money laundering" probe, not for political reasons as alleged by President Trump.