Since its announcement three months ago, about 5.5 million borrowers have applied for the new federal student loan debt relief program.
Student Loan Debt Relief Program most applicants are SAVE Plan borrowers. (Source: francescoridolfi.com/Canva)
Student Loan Debt Relief Program Application
Nearly 3 million SAVE Plan borrowers stopped their monthly loan payments. Black, Latino, Native American, and Alaskan Native students eligible for federal Pell grants benefit most from these debt savings. Most SAVE Plan borrowers will halve their lifetime loan payments. SAVE participants’ loan balances will decrease if they make regular payments as the Education Department no longer charges interest. The SAVE Plan lowers undergraduate and graduate loan rates. Undergraduate loan installments will drop from 10% to 5%. SAVE requires borrowers with undergraduate and graduate loans to pay a weighted average of their principal balances. Combination borrowers pay 5-10% of income.
Borrowers earning less than $32,800 or a family of four earning less than $67,000 can still pay nothing. Unlike income-driven repayment schemes, borrowers earning more than these annual amounts save $102 monthly ($1,224 annually). SAVE Plan operates in all states and congressional districts. California and Texas have over 450,000 SAVE borrowers, but Missouri, Ohio, and Michigan congressional districts have the most. Additional data is here. Consumer advocates highlight the program’s focus.
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