EDUCATION
Until what end date can I apply for student loan forgiveness?
The SAVE plan can be applied for already and comes into effect next year but there are no debt forgiveness plans at present.
Student debt forgiveness is off the cards and has been since the Supreme Court struck down the plan last month.
Under that plan, 40 million students with outstanding debt could applied for the forgiveness program which would have struck down $10,000 of debt per person.
Don’t worry about the final application date, there won’t be any further changes until after the next election. But there is a recently-announced other option for people looking for any support in the ever-increasing student debt sinkhole.
What has replaced student loan forgiveness?
The new SAVE plan from the White House will amend the terms of the Revised Pay As You Earn (REPAYE). The proposed regulations would increase the amount of income protected from repayment from 150 percent of the Federal poverty guidelines to 225 percent. That level is roughly the equivalent of a $15 hourly wage based upon the 2022 guidelines for a single borrower working fulltime.
For undergraduate loans, the plan cuts in half the amount that borrowers have to pay each month from 10% to 5% of discretionary income. It includes a guarantee that no borrower earning under 225% of the federal poverty level, about the annual equivalent of a $15 minimum wage for a single borrower, will have to make a monthly payment. Those borrowers with unpaid monthly interest will not be charged, even when that monthly payment is $0 because of the low income.
The newly launched beta site will allow borrowers to start submitting applications for the program. The SAVE plan will go into effect on July 1, 2024.