Danielle Douglas-Gabriel:
I mean, certainly, rolling out this most recent income-driven repayment plan, dubbed SAVE, is a pretty big step in trying to make it easier for borrowers to afford their payment.
This is by far the most generous repayment plan on the market in terms of protecting more of an individual's income in the calculation of their monthly payments. It certainly also offers a shorter pathway to forgiveness for people who are low-balance borrowers, low-income borrowers.
But at the same time, I am hearing from borrowers that they are having trouble getting through to their servicers. They are having long wait times. Some of them are having issues with the — applying for the plan. But to the administration's credit, they have offered effectively a 12-month grace period, whereby, if borrowers are having a hard time with their payments, it won't be reported to the credit bureaus, and they won't, like, end up in collection.
So those are important steps to make sure that you don't have a huge spike in delinquencies. Still, you really want to see what the next couple of months are going to produce in terms of how people are feeling about the restart of their payments, how they're managing that bill back into their budget.
For some people, this is the $300, $400, $500, sometimes even $1,000 dollar bill that is being added back at a time where we're still dealing with inflation, when we're still dealing with high housing costs and the like.
So, I'm really curious to see how this plays out in the next few months.
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