Eligibility Criteria for $0 Student Loan Payments: Who Qualifies?
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Eligibility Criteria for $0 Student Loan Payments: Who Qualifies?

Although student loan payments are scheduled to commence shortly, some borrowers may have zero monthly payments.

Tuesday marked the official introduction of the Biden administration’s Saving on a Valuable Education (SAVE) Plan.

Vice President Kamala Harris stated in a statement that the proposal might save the average borrower approximately $1,000 per year. It is anticipated that tens of millions of borrowers will qualify for SAVE, which is now the primary income-driven repayment option for borrowers.

In accordance with the Department of Education, SAVE determines a monthly contribution based on family size and monthly income.

SAVE’s monthly payments are significantly lower than those of other IDR plans because the poverty threshold is raised to 225%, from 150%, of income. 

If a borrower’s annual income is $32,800 or less, then the Federal Student Aid Office states that they are exempt from paying any loan payments

 A four-person household should aim for an annual income of $67,500 or less.

Moreover, the loan balance of a borrower who makes their regular payments will not increase due to accrued interest.

Monthly Student Loan Payment of $0 on the Save Plan

The Department of Education estimates that individuals who borrow on the SAVE plan will be liable for 10% of their discretionary income.

As was previously noted, the projected monthly payment for a single borrower income around $30,000 would be $0. The monthly payment for a family of five earned $60,000 or less will also be $0.

The best way to estimate your potential obligation is to submit an online application for the plan. The application process, according to the Department of Education, takes roughly 10 minutes.

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How Can You Determine if You Qualify?

Eligibility–Criteria-For-$0-Student-Loan-Payments-Who-Qualifies
Although student loan payments are scheduled to commence shortly, some borrowers may have zero monthly payments.

The REPAYE program has been replaced with the new SAVE program. The Department of Education will enroll you in SAVE automatically if you were previously registered in the REPAYE program.

If you have federal student loans, you’ll need to verify that they are eligible for the repayment option. All direct loans, including subsidized and unsubsidized loans, PLUS loans for graduate and professional school, and consolidation loans that do not pay off PLUS loans for parents are included.

Source:  YAHOO

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