More than four million borrowers have enrolled in the SAVE Plan to pay back their student loans, according to a Tuesday release from the Department of Education.
The is an income-driven repayment plan. Borrowers who make more than about $15 an hour and enroll in the plan are expected to save about $1,000 more a year compared to other income-based repayment options.
Borrowers who make less than the $15 an hour threshold won’t have to make payments on their debt.
So long as borrowers make their monthly payments, they won’t be charged additional interest on their outstanding principal.
Under the new application process, the IRS can access borrower accounts directly, which means applicants won’t have to renew or reapply for their payment plans every year.
“The new application is easy and quick. Most people only need about 10 minutes to complete it,” said Federal Student Aid Chief Operating Officer Richard Cordray. “Borrowers can get their monthly payment calculated in real time, and they can choose to have their IDR application recertified automatically each year.”
The Department of Education says it’s invited almost 30 million borrowers to apply for repayment with the SAVE Plan.
More benefits are , including further reduced payments for undergraduate loans, and a program to forgive remaining balances of $12,000 or less if borrowers make 10 years of payments.