Monday, April 22, 2024

Tens of thousands of Louisianians enrolled in student loan repayment plan that could lead to forgiveness

by BIZ Magazine
woman wearing academic cap and dress selective focus photography

By Piper Hutchinson, Louisiana Illuminator

The Biden administration announced that 5.5 million borrowers nationwide have enrolled in an income-based student loan repayment plan that offers a path toward debt forgiveness.

The Saving on a Valuable Education (SAVE) Plan, which 82,300 Louisianians have enrolled in, offers $0 monthly payments to 2.9 million borrowers, with other borrowers saving an estimated $102 per month.

The new figures include 1.8 million borrowers who are new to an income-driven repayment plan and 364,000 who have switched from another from another plan since September.

Enrolling in the program could lead to student debt forgiveness for borrowers who do not repay the balance of their loans by the end of the repayment period.

U.S. Department of Education data indicates that as many as 75% of SAVE-enrolled borrowers received the Pell Grant, tuition aid given to low-income students. A department press release said the plan offers relief to many borrowers disproportionately impacted by student loans, including students of color and low-income borrowers.

The plan differs from other income-driven repayment plans because it uses an expanded poverty exemption, which excludes more of a borrower’s income from the program’s repayment calculation.

“Under President Biden, the Department created the SAVE Plan so that young people and working families can climb the economic ladder without unaffordable student loan debt weighing them down,” U.S. Secretary of Education Miguel Cardona said in a press release.

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