Monday, February 26, 2024

Millions Enrolled in New Student Loan Repayment Program

The Rotunda at the University of Virginia. (Sarah Vogelsong / Virginia Mercury)

WASHINGTON — More than 4 million federal student loan borrowers are enrolled in the Biden administration’s new repayment program, according to figures released Tuesday by the Department of Education.

With the pause of more than three years on federal student loan repayments coming to an end in October and the Supreme Court’s summer decision to strike down the White House’s one-time debt relief program, the Department of Education has rolled out several repayment and loan forgiveness programs. One of those initiatives is the Saving on A Valuable Education, or SAVE, plan that for some borrowers could result in no monthly payments.

“Our top priority is to support borrowers as they prepare to return to repayment with the tools and resources that they need,” Jason Miller, deputy director for management at the Office of Management and Budget, said on a call with reporters Tuesday.

The new income-driven repayment plan calculates payments based on a borrower’s income and family size and forgives balances after a set number of years. The Department of Education has estimated that most borrowers will save about $1,000 per year under the new plan.

Borrowers who are currently in the Revised Pay as You Earn plan will automatically be enrolled in the SAVE program.

Democrats, such as U.S. Senate Majority Leader Chuck Schumer of New York, are expecting legal challenges.

“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 said in a statement following the opening of applications for the SAVE program on Aug. 22.

So far, the states with the highest number of borrowers enrolled in the program are Texas, with 345,800, California with 331,600, Florida with 291,100, New York with 212,800 and Pennsylvania with 170,200. Virginia has 104,800 borrowers enrolled.

James Kvaal, the undersecretary of education, said no borrowers will owe payments if they make $15 an hour while supporting a family, and that borrowers will not see their balances grow due to unpaid interest “as long as they keep up with their payments.”

“We’re not just lowering payments for today’s borrowers, we’re helping entire families and communities, and we’re making paying for college more affordable for millions of future students,” Kvaal said.

Borrowers who have defaulted on their student loans at any point will be able to enroll in the SAVE program through the Fresh Start program, which is a one-time program for those who have defaulted on federal student loan repayment.

Even though the pause on federal student loans is set to end in October, borrowers will still have a year of leniency to begin repayments, but interest will accrue starting this month. The program starts Oct. 1 and will extend until Sept. 30 of next year.

  • Alabama 63,500
  • Alaska 6,300
  • Arizona 87,200
  • Arkansas 38,500
  • California 331,600
  • Colorado 78,500
  • Connecticut 39,300
  • Delaware 12,300
  • Florida 291,100
  • Georgia 178,600
  • Hawaii 11,000
  • Idaho 25,100
  • Illinois 142,100
  • Indiana 89,500
  • Iowa 39,900
  • Kansas 35,000
  • Kentucky 60,300
  • Louisiana 63,800
  • Maine 18,800
  • Maryland 75,600
  • Massachusetts 66,700
  • Michigan 143,600
  • Minnesota 73,900
  • Mississippi 45,300
  • Missouri 82,300
  • Montana 13,800
  • Nebraska 22,400
  • Nevada 35,300
  • New Hampshire 15,600
  • New Jersey 92,300
  • New Mexico 25,000
  • New York 212,800
  • North Carolina 144,300
  • North Dakota 7,500
  • Ohio 181,400
  • Oklahoma 45,100
  • Oregon 61,500
  • Pennsylvania 170,200
  • Rhode Island 12,000
  • South Carolina 81,600
  • South Dakota 10,700
  • Tennessee 91,800
  • Texas 345,800
  • Utah 30,000
  • Vermont 7,500
  • Virginia 104,800
  • Washington 74,800
  • West Virginia 22,800
  • Wisconsin 70,100
  • Wyoming 5,100

Virginia Mercury is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Virginia Mercury maintains editorial independence. Contact Editor Sarah Vogelsong for questions: Follow Virginia Mercury on Facebook and Twitter.

Related Articles