Millions of Americans who are burdened with student loan payments could soon find relief under a new bill proposed by Senate Democrats. The Savings Opportunity and Affordable Repayment (SOAR) Plan would make student loans more affordable by increasing income-driven repayment plans. If enacted, the plan would enable many borrowers to pay $0 per month depending on their income level.
But who qualifies for those benefits, and what does this mean for the future of U.S. student debt? Here is what you need to know.
Who qualifies for $0 monthly student loan payments?
The SOAR Plan is better than the SAVE repayment plan, which was enacted by former President Joe Biden. The big difference in the SOAR Plan is expanding eligibility for $0 monthly payments to more borrowers.
Borrowers with incomes less than 250% of the federal poverty level would owe $0 monthly payments. This would be an increase from the current 225% limit in the SAVE Plan.
A simple explanation is that one single person who earns less than $37,500 per year or a family of four with earnings less than $75,000 would owe zero monthly payments.
This growth can provide short-term relief to millions of borrowers struggling to make loan payments as they cover essential living expenses.
How does the SOAR Plan change student loan forgiveness?
The SOAR Plan also makes it easier for borrowers to get their loans forgiven faster. Under the proposed changes:
- Borrowers who attended a two-year college or trade school could have their loans forgiven in just 10 years of repayment.
- Currently, the SAVE Plan allows forgiveness after 20 to 25 years for most borrowers.
- Borrowers with Parent PLUS loans and Federal Family Education Loans (FFEL) would also be allowed to enroll, which was not an option under the previous plan.
This means that more borrowers will qualify for student loan relief much sooner than they expected.
Will the SOAR Plan actually pass?
Even though the SOAR Plan could bring major benefits to student loan borrowers, its future in Congress remains uncertain. Here is why:
- The Republican-controlled House and Senate are likely to oppose the bill.
- Some lawmakers argue that expanding student loan relief is too expensive and unfair to those who already paid off their loans.
- Republican budget proposals include plans to repeal the SAVE Plan, and they are unlikely to support the SOAR Plan either.
With strong opposition from conservative lawmakers, the SOAR Plan faces an uphill battle. However, Democrats are pushing forward, arguing that student debt relief is necessary to help millions of Americans achieve financial stability.
What happens if the SOAR Plan does not pass?
If the SOAR Plan fails to gain enough support, the future of student loan repayment could look very different.
- The SAVE Plan is currently blocked in court, leaving many borrowers in limbo.
- Without a new repayment plan, millions of borrowers could see higher monthly payments in the near future.
- Student loan forgiveness programs may become more limited if Republicans push forward with their budget proposals.
This uncertainty is leaving many borrowers frustrated. As one borrower, Natasha Stephens, told Business Insider, “I think that it helped a lot of people, and it is really heartbreaking that it just ended with nothing.”
The debate over student loan relief is far from over, and the SOAR Plan could be a game-changer—if it makes it through Congress.
Continue reading:
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