Senate Majority Leader Chuck Schumer (D-NY) endorsed the Biden administration’s new income-driven student loan repayment plan for borrowers Tuesday, saying the president “deserves accolades and support for this action.”
“This is a giant step forward in decreasing the burden of crushing debt that rests on so many borrowers’ shoulders,” Schumer said in a statement on Tuesday. “ Low-income students, whose burdens will be cut in half, and most other students, who will never pay more than 5% of their income, will breathe a sigh of relief across every corner of America.
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The Senate leader's comments come after the administration launched a long-awaited website Monday that will allow student loan borrowers to apply for the administration's modified income-driven repayment program ahead of repayments restarting this fall.
The Saving on a Valuable Education, or SAVE, plan modified the existing rules on income-driven repayment so that borrowers who qualify for the program now make smaller monthly payments and are eligible for loan forgiveness more quickly. Repayments will resume in October, and interest will begin to accrue on student loans for the first time in more than three years in September.
Under the previous regulations, borrowers in an income-driven repayment plan had to make payments commensurate with 10% of their discretionary income above $30,000 and could be eligible for loan forgiveness after 20 years. Now, the requirements have been modified to allow borrowers to pay 5% of their discretionary income and can begin qualifying for loan forgiveness after 10 years, depending on the size of their balance.
Schumer predicted that the administration may face some legal hurdles in the future.
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“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. “The fight to cancel student debt is far from over, but this is a massive step in the right direction. President Biden deserves accolades and support for this action.”
Borrowers can visit a page on the Federal Student Aid website and find a quick application process that takes around 10 minutes to complete.