Despite facing opposition, President Biden has been working on debt relief in support for student loan borrowers as student loan payments restart soon.
As Student Loan Payments Restart, Biden Announced New Debt Relief Plan|CNBC
As the student loan payments restart will happen soon, many borrowers are expecting to struggle in making their payments.
In June, in line with the nearing student loan payments restart, it was noted that the Supreme Court strike down Biden’s student loan forgiveness plan that might provide relief for approximately 37 million borrowers when the student loan payments restart, causing borrowers to worry.
President Biden has been committed to providing student debt relief, as mentioned in a White House Fact Sheet, amidst facing opposition.
As the student loan payments restart, the Department of Education is implementing a 12-month repayment period starting from October 1, 2023, to September 30, 2024. This period is designed to help borrowers who are facing financial difficulties due to the pandemic by preventing them from being considered late on their payments when student loan payments restart, having their credit affected, going into default, or being referred to debt collectors.
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A recent survey by U.S. News and World Report found that 46% of borrowers feel they need additional financial readiness before the student loan payments restart in October.
Furthermore, 30% are still uncertain about the exact date when will their student loan payments restart and 48% would like to know the specific amount of fees they owe.
The “on-ramp” initiative is a temporary aid that helps borrowers by waiving the damaging consequences of missing loan payments until September 30, 2024. However, interest will still accrue during this period. Additionally, the Biden-Harris administration has introduced a new income-driven repayment program called the Saving on a Valuable Education (SAVE) plan, which replaces the Revised Pay as You Earn (REPAYE) plan. This one-year grace period and the SAVE plan aim to provide financial relief to vulnerable borrowers.
An Education Department spokesperson said that the Biden-Harris Administration is determined to fix the student loan system and provide relief to borrowers as student loan payments restart. They believe that a recent lawsuit from right-wing special interests is an attempt to keep borrowers in debt, despite their eligibility for forgiveness through income-driven repayment plans. The Education Department is resolved to defend working families and will not back down, The Hill reports.
The Hill reported that borrowers are currently facing the challenge of understanding the implications of recent legal changes on their loans. At the same time, they are also losing hope in receiving further assistance from the administration before the student loan payments restart in October.
Following the Supreme Court’s ruling, President Biden has stated that he is developing a new plan, but no specific information has been provided yet.
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