New student loan repayment plan beta application opens. What happens next?
A beta application for the new student loan repayment plan is open. Here’s what you need to know.
The testing application is now open on the Federal Student Aid website where you can apply for the new income-driven repayment plan called Saving on a Valuable Education — what the department calls the “most affordable repayment plan yet.”
The new plan, which was introduced after the Supreme Court shot down President Joe Biden’s student debt forgiveness plan, cuts how much borrowers have to pay of their discretionary income and means your loan balance won’t grow as long as you keep up with payments.
If you sign up this summer, your application will be processed before payments resume in October, CNBC reported. And if you sign up during the beta period, you don’t have to apply again later. If you’re already enrolled in or signed up for the Revised Pay As You Earn, or REPAYE, plan now, you’ll be automatically placed on the SAVE plan once it opens.
Before signing up, you can use the Office of Federal Student Aid’s loan calculator. That tool can show you how to lower your payment, how to pay off your loans faster or decide whether to consolidate.
“This testing period will allow the Department to monitor site performance through real-world use, test the site ahead of the official application launch, refine processes, and uncover any possible bugs prior to official launch,” a department spokesperson told Business Insider.
How to apply
The Education Department says it takes less than 10 minutes to fill out. These are the steps:
You’ll go to studentaid.gov and log in. Select menu, then loan repayment, and income-driven repayment plan request. Then start the application.
You’ll then confirm your contact information. Then, you’ll review your federal loan information and decide if you want to leave or take your loans out of deferment or forbearance.
Then, confirm your personal information. This includes whether you’re married and your family size.
After that, you’ll transfer or enter your federal financial information, noting any significant decreases in income since your last tax return.
And last, you can review your current repayment plan or switch to a new one.
You’ll be able to see your monthly payment, total to be paid and pay off date.
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