Kitten Night Farts

Borrowers can now apply for new, income-based student loan repayment

More than 20 million borrowers are eligible under the new repayment plan, and many will see lower payments.

NPR

Under the SAVE plan, as long as borrowers make their monthly payments, interest will not accumulate. With previous plans, borrowers with low or $0 payments — too low to cover their monthly interest charge — saw that interest accrue. Now, the government says, that won't happen.

The department says that under the old plan, borrowers repaid, on average, $10,956 for every $10,000 they borrowed. Under the new plan, they would pay back just $6,121.

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Borrowers can now apply at studentaid.gov/SAVE . In an announcement video, President Biden assured borrowers that the application will take "10 minutes."

The program allows borrowers to opt in to a feature that allows the Education Department to access their tax returns from the Internal Revenue Service. This will allow the department to automatically recertify borrowers' enrollment every year, so they don't have to keep applying and updating.

The administration is urging borrowers to apply soon because, after three years of pause extensions, student loan payments are set to resume in October, with interest starting to accrue in September.