"Biden's SAVE Plan Settlement Slams Borrowers with Immediate Payment Hike"

Millions of Borrowers Face Immediate Payment Hike Under Biden's SAVE Plan Settlement In a move that has left many low-income borrowers reeling, the US Department of Education announced a proposed settlement agreement to end a popular yet contentious student loan repayment plan. According to the settlement, millions of borrowers enrolled in the Saving on a Valuable Education (SAVE) plan will be required to resume making payments, with interest resuming in August, affecting their flexible repayment terms and promise of expedited loan forgiveness. The SAVE plan, introduced by the Biden administration, was designed to provide relief to low-income borrowers who had been struggling to make payments. However, the plan faced opposition from Republican state attorneys general, who filed a lawsuit against the Department of Education. The proposed settlement aims to end this lawsuit, but at a significant cost to borrowers. "This shift will have a devastating impact on many low-income borrowers who were counting on the SAVE plan's flexible repayment terms," said a spokesperson for the National Association of Student Financial Aid Administrators. According to NPR News, the SAVE plan was the most popular student loan repayment plan introduced by the Biden administration, with millions of borrowers enrolled. The plan offered flexible repayment terms and a promise of expedited loan forgiveness. However, the proposed settlement will require borrowers to resume making payments, with interest resuming in August. This means that borrowers will be responsible for paying back the principal amount of their loans, as well as interest that has accrued since the plan was put on hold. The proposed settlement has sparked concerns among advocates for student loan borrowers. "This settlement is a betrayal of the Biden administration's promise to provide relief to low-income borrowers," said a spokesperson for the Student Borrower Protection Center. "We urge the Department of Education to reconsider this proposal and work towards a solution that truly benefits borrowers." The proposed settlement is currently open for public comment, with a deadline for submissions set for January 2024. The Department of Education will then review the comments and make a final decision on the settlement. Borrowers who are affected by the proposed settlement are advised to review their loan documents and contact their loan servicer for more information. In a statement, the US Department of Education said that the proposed settlement is designed to "provide certainty and stability" for borrowers. However, critics argue that the settlement will have the opposite effect, leaving many borrowers with increased financial burdens. As the Department of Education moves forward with the proposed settlement, it remains to be seen how this will impact the lives of millions of borrowers who were counting on the SAVE plan's flexible repayment terms. Sources: - NPR News: Millions of borrowers in Biden's SAVE plan would start paying under new settlement - Breaking: NPR News: DEVELOPING: Millions of Borrowers Face Immediate Payment Hike Under Biden's SAVE Plan Settlement