Biden's SAVE Plan: A New Approach to Student Debt

The Biden administration has announced a new repayment plan called the Saving on a Valuable Education (SAVE) plan, following the Supreme Court's decision to strike down President Biden's student loan forgiveness plan. The SAVE plan aims to reduce borrowers' monthly payments, with highlights including cutting the amount undergraduate loan borrowers need to pay each month, pausing payments for those making less than 225% of the federal poverty level, and forgiving loan balances after 10 years of payments for borrowers with original loan balances of $12,000 or less. Borrowers will be able to enroll in SAVE this summer before student loan repayments begin in October. However, interest will accrue during a 12-month "on-ramp" repayment program. The Education Department plans to launch a direct application website for SAVE later this summer.