Under the SAVE plan, borrowers have the opportunity to significantly reduce their monthly payments, thereby lightening the financial burden that often accompanies pursuing a college degree.
Under the SAVE plan, borrowers have the opportunity to significantly reduce their monthly payments, thereby lightening the financial burden that often accompanies pursuing a college degree.
The Biden-Harris administration has officially launched the Saving on A Valuable Education plan.
The income-driven repayment initiative, available via StudentAid.gov, marks a major step toward making higher education more affordable and providing relief to struggling student loan borrowers, according to a government release.
Under the SAVE plan, borrowers have the opportunity to significantly reduce their monthly payments, thereby lightening the financial burden that often accompanies pursuing a college degree.
The new approach, touted as the most economical repayment plan in history, aims to curb the adverse impact of student debt on working families and aspiring students.
A pivotal aspect of the SAVE plan is its flexibility based on income levels. Borrowers earning less than $15 per hour will have the luxury of eliminating their monthly payments altogether, while those with higher incomes can anticipate saving more than $1,000 annually compared to other income-driven repayment strategies.
The plan also guarantees that borrowers won’t witness their loan balances escalate due to unpaid interest, as long as they adhere to the required payments.
The updated repayment application process takes only 10 minutes to complete, streamlining the enrollment process for borrowers. It offers the convenience of securely accessing income data from the Internal Revenue Service and ensures automatic annual recertification, negating the need for yearly reapplication.
The feature is also set to prevent missed annual recertifications, which often lead to complications for borrowers.
“The SAVE plan is another huge step forward in President Biden’s tireless efforts to fix the broken student loan system, reduce the burden of student debt on working families, and put borrowers first,” said Education Secretary Miguel Cardona.
To amplify its benefits and support borrowers effectively, the government is also launching the “SAVE on Student Debt” campaign.
The nationwide initiative will forge partnerships with prominent grassroots organizations, fostering collaborative efforts across public, private, and nonprofit sectors.
The goal is to ensure that borrowers leverage the advantages of the SAVE plan to the fullest extent possible and tap into the array of resources and debt forgiveness programs offered by the US Department of Education.
The department and its campaign partners are also orchestrating a SAVE on Student Debt Week of Action in September. The event will include outreach programs, training sessions, and information dissemination through community-based organizations, student networks, and social media campaigns.
Leading entities such as Civic Nation, NAACP, National Urban League, Rise, Student Debt Crisis Center, UnidosUS, and Young Invincibles will spearhead these initiatives.
The department estimates that over a million low-income borrowers could benefit from reduced or eliminated payments.
Furthermore, the plan to halt loan growth due to unpaid interest is poised to shield 70 percent of borrowers on income-driven plans from accruing additional debt.
The plan’s structure will decrease total payments per borrowed dollar by an average of 40 percent, with substantial reductions for various categories of borrowers.
