Biden admin launches SAVE plan for student loan payments based on income

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Biden student loan plan overview: 

• Who: The Biden administration announced its new student loan relief program called the Saving on a Valuable Education (SAVE) plan.
• Why: The White House says the SAVE plan will be “the most affordable student loan plan ever” and will reduce the monthly payments of many borrowers to zero. 
• Where: The SAVE plan will affect student loan borrowers nationwide. 

The Biden administration announced a new plan, dubbed the Saving on a Valuable Education (SAVE) plan, that will offer income-based relief to student loan borrowers.

The White House is calling the SAVE plan “the most affordable student loan plan ever” and says it expects it to reduce the monthly payments of many borrowers to zero.

Additionally, President Joe Biden’s administration says it expects the SAVE plan to save other borrowers around $1,000 per year and prevent balances from growing due to unpaid interest. 

“The Biden-Harris Administration believes that education beyond high school should unlock doors to opportunity, not leave borrowers stranded with debt they cannot afford,” the White House says in a statement. 

SAVE plan calculates student loan payments on family size, income, White House says

The SAVE plan calculates payments based on both a borrower’s income and their family size, according to the Biden administration, which estimates the program could benefit more than 20 million borrowers. 

“The benefits of the SAVE plan will be particularly critical for low- and middle-income borrowers, community college students and borrowers who work in public service,” the White House says. 

The Biden administration, which says it has already canceled more than $116 billion in student loan debt for 3.4 million Americans, says the SAVE plan aims to build on actions already taken by the administration to “deliver relief to student loan borrowers.” 

The Department of Education (DOE), meanwhile, with the help of grassroots organizations, is set to launch an outreach campaign called “SAVE on Student Debt” that aims to encourage borrowers to sign up for the plan, according to the White House. 

“The outreach campaign will build on the direct outreach underway by the (DOE) and Federal Student Aid to ensure borrowers know about the SAVE plan and other programs to help them access debt relief,” the White House says. 

The DOE announced last month that it would forgive $39 billion in federal student loans for more than 800,000 borrowers who are on income-driven repayment plans. 

Do you plan on signing up for the Biden administration’s SAVE plan? Let us know in the comments.

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