Schumer hails Biden’s debt relief plan as a ‘huge stride forward’.
Senate Majority Leader Chuck Schumer Endorses Biden Administration’s New Student Loan Repayment Plan
Senate Majority Leader Chuck Schumer (D-NY) enthusiastically endorsed the Biden administration’s groundbreaking income-driven student loan repayment plan on Tuesday, praising the president for taking action to alleviate the burden of crushing debt on borrowers.
“This is a giant step forward in decreasing the burden of crushing debt that rests on so many borrowers’ shoulders,” Schumer stated. “Low-income students, whose burdens will be cut in half, and most other students, who will never pay more than 5% of their income, will breathe a sigh of relief across every corner of America.”
Introducing the Saving on a Valuable Education (SAVE) Plan
The Senate leader’s endorsement comes in the wake of the administration’s launch of a highly anticipated website, which allows student loan borrowers to apply for the modified income-driven repayment program ahead of repayments restarting this fall.
The Saving on a Valuable Education, or SAVE, plan has revolutionized the existing rules on income-driven repayment. Now, qualifying borrowers can make smaller monthly payments and become eligible for loan forgiveness at a faster pace. Repayments are set to resume in October, with interest accruing on student loans for the first time in over three years starting in September.
Previously, borrowers in an income-driven repayment plan had to make payments equivalent to 10% of their discretionary income above $30,000 and could potentially qualify for loan forgiveness after 20 years. However, the new modifications allow borrowers to pay only 5% of their discretionary income and potentially qualify for loan forgiveness after just 10 years, depending on their balance.
Support and Potential Challenges
Schumer acknowledged that the administration may face legal hurdles in the future but expressed confidence in their careful attention to legal details.
“While there will be those that will challenge this in court, the administration has carefully crossed the legal t’s and dotted the legal i’s,” Schumer remarked. “The fight to cancel student debt is far from over, but this is a massive step in the right direction. President Biden deserves accolades and support for this action.”
Borrowers can easily access the quick application process, which takes approximately 10 minutes to complete, by visiting the Federal Student Aid website.
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