PENNSYLVANIA, USA — The 800,000 people who will now have their student loans forgiven show us just how crippling student debt can be.
The Biden-Harris Administration is forgiving loans that borrowers have been paying back for more than 20 years.
White House Senior Communications Adviser Rachel Thomas told Newswatch 16 over Zoom that this is just the first piece of President Biden's "Plan B" to provide student debt relief, "In addition, the president and his administration announced the most generous income-based repayment plan in history."
That is called the SAVE Plan, and borrowers can apply for it before the end of the "pandemic pause" in October when student loan repayments must begin again after they were paused during the height of the COVID-19 pandemic.
"The vast majority of borrowers will be eligible to save money through that plan. In terms of their monthly finances, the SAVE plan will cut monthly payments in half, it will save borrowers on average 1,000 dollars a year, and it will bring many borrowers' monthly payments to zero," said Thomas.
The SAVE Plan cuts down on interest so long as you make consistent payments and caps your monthly payments to five percent of your income after taxes.
So, a single person who makes $50,000 a year won't pay more than $143 a month.
Anyone making less than $15 an hour at their job won't have to pay at all until their income goes up.
The SAVE Plan also saves borrowers from the burden faced by the 800,000 people who are now receiving loan forgiveness after two decades.
SAVE Plan borrowers will have their loans forgiven after 10 years of payments.
Borrowers will be able to apply for the SAVE Plan later this summer.
You can find more information about the plan by clicking here.
Check out WNEP’s YouTube channel.