Changes in Student Loan Repayment Plans

SOURCE www.npr.org
Big changes are coming for student loan borrowers on July 1, with the SAVE plan cutting monthly payments in half for many borrowers. The plan exempts more income from payments and stops interest accumulation beyond what a borrower can afford. While some disagree with the level of debt forgiveness, the program is set to proceed despite legal challenges.

Key Points

  • SAVE plan cuts monthly payments for student loan borrowers in half
  • SAVE plan exempts more income from payments and stops interest accumulation
  • Legal challenges exist against the SAVE plan but may not affect the July payment drop

Pros

  • Monthly payments for student loan borrowers could be cut in half under the SAVE plan
  • The SAVE plan exempts more income from payments and stops interest accumulation beyond what a borrower can afford
  • No eligibility income limit and works for many types of loans

Cons

  • Some Republicans in Congress and states are fighting to stop the SAVE plan
  • Legal challenges in Texas and Missouri aim to overturn the program