President Joe Biden on Tuesday launched a promotional blitz for his new program that helps student loan borrowers repay their debt, just weeks before millions of Americans are set to receive a loan bill for the first time since the beginning of the pandemic.
The Biden administration is mobilizing to convince borrowers across the country to sign up for the new income-driven repayment program — dubbed the “SAVE plan” — which caps interest accrual and lowers the monthly payment amount for many borrowers.
“It’s the most affordable student loan plan ever,” Biden said in a video released by the White House on Tuesday, describing the program as a major reform to a student loan system “that hurt borrowers for much too long.”
“If you’re eligible for the SAVE Plan, sign up now so you can lower your monthly payments in advance of payments resuming this fall,” Biden said.
Honestly whatever on the whole repayment thing cause I’m poor and fucked no matter what so… Meh.
But seriously can we fucking stop pretending the poverty line is real or even close to where they say it is? When every single benefits package and plan talks about a 200% increase from base poverty line or $20,000 over the base poverty limit for approval it just means poverty is much more common and a lot more expensive than we want to admit but it would freak out hundreds of thousands to realize just how poor they actually are.
Rip off the bandaid of bullshit poverty line adjustments and just be honest that the average American is low class now.
Yeah, the “temporarily embarrassed millionaires” probably don’t want to know how embarrassed they actually are, or how permanent “temporarily” is.
This article doesn’t really say what the SAVE plan does so I’m reposting this here.
…the SAVE plan is coming in July 2024 to replace REPAYE, with some parts rolling out this summer and all the details here.
The department says that under the old plan, borrowers repaid $10,956 for every $10,000 they borrowed. Under the new plan, they would pay back just $6,121.
It’s more technical than direct forgiveness but will change income-based plans in the following ways according to this NPR article:
Starting Summer 2023:
- floor for protected income rising from 150% to 225% of poverty line
- no interest while payments are being made
Starting Summer 2024:
- payments now based on 5% rather than 10% of borrowers’ remaining income
- those who borrow $12,000 or less can gain full forgiveness in 10 years rather than 20 (with each additional $1000 adding another year so $13,000=11 years etc.)
It’s a start, hopefully someone sees this and saves some money.
Also want to add that these changes are not subject to Congressional approval. They could be repealed (impossible with a Dem Senate + Presidential veto) or they could be struck down by SCOTUS, but this is all being performed via powers given by the Higher Education Act and are generally on much firmer legal ground than the loan forgiveness plan SCOTUS scuttled.
Just applied tonight and looks like it should reduce my payment by about 50%.
I’m so happy for you! I’m going to see if we can bring down my wife’s grad school loan payments. They may not apply.
Thank you! My loans are from law school and they qualified so definitely give it a shot. Good luck to you and your wife!
Oh man that’s great! This is not the complete loan forgiveness I had hoped for but it’s a start and I hope lots more benefit from this especially the ones who needed it the most.
No interest while payments are being made is absolutely gigantic. It’s really a game changer.
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The plan would decrease my payments by about $20/mo and would increase the total amount I would pay. Doesn’t seem like it saves me anything. I’m better off continuing to pay my previous minimum payment and pay the loans off early.
I wish they would eliminate/lower the interest rate.
It eliminates my wife’s payments entirely with no interest accruing. Which is great because we’re dirt poor at the moment.
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the current brand new super great SAVE repayment plan that I have access to literally increases my payment by $100 a month
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yeah I just backed out of the agreement
How does that work
So much for slashing the debt altogether, eh? An excellent production.
Unfortunately, this new plan seems like it’ll increase my payments from about $200/mo to over $900/mo. The calculator says the $900/mo plan comes with an offer of $0 in forgiveness (and says so directly). Even if I keep the $200/mo plan and won’t be fully paid off until 2046 or something (vs 2027 at $900/mo), it still offers me $0 in forgiveness.
I still have $36k in loans and have been paying them off since 2005. I’ve already paid more than I’ve owed, due to interest. I used to be poor, but not really anymore; that kinda happens over 20 years. I suppose I can be happy everyone else, but this doesn’t mean squat for folks like me.
How did you figure this out? I’m trying to figure out if it’s worth me applying for it.
I received an email from studentaid.gov inviting me to apply. It points to a calculator—really a screening-level application—on their site I can use to compare before applying.
That’s weird. In reading the specifics of the plan, I don’t see how the math would work out towards increasing payments. Unless your income changes significantly, there isn’t really a provision that would increase payments here. It’s designed to drive down interest for all
If his income now is more than it was when he set up his first income based repayment plan I think It would go up. I would expect that to be the case for most people because over time salaries go up
I was never on an income-based repayment plan. I was always on the standard plan. The Internet was really different in 2005, and the info available at my fingertips was much, much less than now. I don’t even know if it was an option, then.
It should be updated with each tax filing though
It’s still not thru congress yet, and the part Biden brags about wouldn’t even start till next summer…
I’ll be surprised if any of it materializes, but that won’t stop moderates from bragging about it.
You can literally apply now. It doesn’t need to go through Congress
You should read an article if you’re going to post it…
Not even getting to the point that people were encouraged to apply for forgiveness and that never happened.
Why didn’t it happen again? Oh yea. It’s because Republicans hate Americans and blocked it. Such a worthless group of people.
But also, they could of passed a fucking bill when they had a majority…
Please tell me when it was that the Biden administration had control of both the House and Senate and could have pushed it through.
You don’t remember when they said we’d all get $2,000 checks (which was bullshit) and that they’d have control of the Senate? For like 30 while seconds after the Georgia runoffs they pretended Sinema and Manchin were actual Democrats. Good thing the Democrats are so good at vetting and controlling their party members.
Slightly better walking corpse 2024! Woooooooo
Sorry… how were Democrats supposed to control who people in West Virginia and Arizona elected exactly?
And what sort of Democrat do you think it’s possible to elect in West Virginia?
I did read it. Did you lol?
Oh ok, guess we should give up then and succumb to our corporate overlords
Nope.
But I feel like pretending something is done before it is after the last couple years…
Is naive at best.
We keep getting told that things are fixed, and people stop paying attention, then a year down the line it’s still not done.
Don’t start running victory laps at halftime, you’ll just tire yourself out.
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This is what we call accelerationists. Race to the bottom. Americans suck because they will never realize the rich have no country. They may have investments but that is their only stake. America falls into poverty, no worry for the rich. They still have their fenced yard and private military.
This is (i) welfare for the well-to-do, (ii) great incentive for colleges to keep pushing up their tuition fees, and (iii) fiscal stimulus during a critical juncture in the fight to tame inflation. Let it not be said that the Republican Party has a monopoly on bad policy ideas.
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People with college degrees, on average, make a million more lifetime dollars than people without. This goes up further with post-graduate education.
Student loan forgiveness should always irst be targeted at college dropouts. Tiering it based on income is not. AS good but is a close 2nd
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I disagree with you, but your position has some sentiments I can understand. So instead of getting angry, downvoting, and throwing a fit, I am just going to respond calmly:
If you look at the actual details of the plan it’s pretty reasonable.
Lowered interest rates for everyone who are making their payments.
Higher threshold for low income earners to get some forgiveness. This counters your “well-to-do” argument.
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Well this plan is the topic. Or so I thought.
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Ya but it’s was an OP comment. Response to the new plan in that context.
I could see if he was responding to a comment that was about a different plan from before. But it was an un truncated comment that responds to the article.
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You’re right too.
Maybe or maybe not Fox News brain rot. Maybe just addressing the greater discussion of the past times as you said. But I assumed in this context otherwise. There’s a lot of people who don’t read articles and just talk in very broad terms.
Explain how you came up with point one. The well to do will not qualify or benefit from this at all. Its based on income and is definitely skewed to benefit well off people at all.
College graduates receive a big wage premium; over a lifetime, average earnings of graduates exceed those of nongraduates by about $1M. Yes, people who just graduated may not be earning high incomes today, but project things out over decades and it’s clear this is not the group in need of support.
In fact, given the magic of compound interest, we would expect a college loan forgiveness programme to greatly increase the net financial position of graduates versus nongraduates, on top of what the graduate earnings premium already achieves. Hence increasing the overall level of wealth inequality in the country.
Not sure how you decided this seeing as this benefits people at the poverty line and not the wealthy. Sure, anything can encourage schools to push up tuition prices, but there’s literally a bill in play right now to cap tuition prices. It’s not loan forgiveness, but it’s far better than nothing. Also, the financial impact is a pittance. It’s not the 50k per borrower floated in 2020. It’s not even the 10k the scotus shot down.
My parents were/are (Mom’s still alive) well-to-do. I was lucky in that I didn’t have to take out student loans. No one is giving me welfare.
My wife, on the other hand, could sure use some relief from the student loan debt she incurred because her family is not the privileged one mine is.
We’re fiscally responsible. We pay our bills on time. We have a fixed-rate mortgage. We have two cars, but one is paid off.
We’re in our mid-40s and she still has a ton of student loan debt. That’s insanity.
Sounds like you have plenty of money but only pay the minimum payments on her loans, which is a questionable choice at best.
It may sound like that, but that would be false. We live paycheck-to-paycheck like a majority of Americans.
We pay what we can afford to pay.
Believe it or not, people who grow up with wealthy parents aren’t necessarily wealthy themselves.
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I never said I was poor. But going into more debt would make us poor.
I’m certainly not upper middle class.
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Nowadays? We bought it 10 years ago. In a depressed small city with high unemployment. It’s also only worth about $200,000. You know how low that is for a house right now?
Maybe don’t make assumptions.
You’re wrong about (i) and (iii) - seriously who does that? - but as someone whose kids will be starting college in a few years I agree with (ii).
We need to find a way to get everyone who is capable a college education without needing loans. Apart from my own personal interests, there is a huge amount of brain power wasted by not having education freely available.
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Welfare is not inherently bad.
Not everyone who has student loans is well to do.
This doesn’t come into effect until next year, at which time inflation should be under control.
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I’m well to do now? This is for me and I consider not eating for 48 hours at a time because the price of food rn is bonkers to be a solid financial decision.
Saw an article earlier today that over 60% of borrowers are planning to boycott repayment. I still haven’t setup an account since my loan got transferred to a new servicer. Seriously considering making them come garnish my wages or something. If enough people do it, the system will almost certainly collapse. I can’t imagine all the servicers trying to go through the garnishment process with that many people.
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Own a home, have a pretty new car, don’t plan on moving anytime soon. Could come up with enough cash to pay for anything I need pretty easily and already have lots of established credit. I’m older and stable.
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Yup, i can. Its almost like I’d be joining in as a form of protest for those who can’t. Weird to have solidarity and sympathy for others right?
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Gee, we should all just sit on our hands and piss our pants for progress. It gets more done. How did I not see this before.
Personally, if I loaned someone a thousand dollars, they were perfectly capable of paying me back, but said that they would be withholding the payment out of solidarity, I’d be rather annoyed.
But hey, if you wanna publicly announce to lenders that your word is meaningless, that’s your call. Certainly hope you don’t wind up in an unexpected bind.
Also, chasing payment from delinquent debtors is a cost that simply gets shifted on to everyone else in the form of higher interest rates on the people who actually are honest, so you’re not doing the poor the service you think you are.
Yes but if we are pretending: now pretend you’re a government that provides services to its citizens. As in, making profit from interest of education loans is counterproductive and undermines the purpose of getting citizens educated.
From what I saw, briefly looking around, the interest rate is a fair bit lower for government loans than private ones, and when you add in inflation and administrative costs, I could imagine the actual profit margin on public loans being relatively low. Regardless though, I strongly agree with the fundamental point that investments in education are generally a really good use of government money.
That said, subsidizing demand like that does give universities a lot of leeway to dramatically increase costs (as well as giving state governments cover to slash funding to state universities). Additionally, given that university graduates go on to make quite a lot more money than non-grads - even if the first several years out can be a bit rough dealing with loan payments - throwing them even more money isn’t exactly the most progressive use of tax funds if you’re aiming to help the poor. I’d much much rather graduates who are actually able to re-pay their loans, even if it involves a bit of belt-tightening for a bit, to do that so that that money can be used to help fund education costs for more people who truly need it. The median student loan debt is about the same as the median cost of attending a public university for one year, so every person that decides to just not pay their debt back is one less student in true need of assistance that won’t be able to go to college. It’s more than reasonable for people who benefited from loans to help fund the next wave of students, and doing so makes the financials much much more scalable and sustainable.
We’re really caring about student loan servicers’ feelings? Like Nelnet? If that’s what they want to do, then it does show solidarity regardless of how privileged they may be.
No one actually thought that the guy who exempted student debt from bankruptcy and is owned by the same billionaires that own Republicans was gonna do what he said?
Not sure what you’re referring to. His student loan forgiveness was blocked by SCOTUS
Blocked for the method he used, Roberts said specifically it would have NOT been blocked had he not tried to push it through with the HEROs act. And it would have been allowed by the Higher Education Act of 1965 which grants the President the authority to cancel debt.
Damn, you’re smarter than all these top attorneys, that’s so cool! But it’s a coincidence that all your comments are parroting Russian troll farms, right?
Everyone that was anyone said he was going about it the wrong way, a way that was doomed to fail. They ALL said the HEA was the correct method since there were provisions that specifically allowed him to cancel debt.
The top justice, in the highest court in the land, SCOTUS John Roberts, spelled it out in his syllabus in the Biden v Nebraska case.
Oh wow, I see the issue. You don’t know how to read SCOTUS opinions. Idk what else to tell you bud.
My payments went from ~ $350 to $29 a month. This is such a relief.
