On Tuesday, the Biden-Harris Administration announced that it has fully launched the updated income-driven repayment application. Student loan borrowers can now officially enroll in the Saving on A Valuable Education (SAVE) plan, which the Administration touts as “the most affordable repayment plan ever created.”
“Starting today, millions of borrowers can reduce their monthly student loan bills by enrolling in the SAVE plan, the most affordable repayment plan in history,” said U.S. Secretary of Education Miguel Cardona. “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. SAVE isn’t just about helping borrowers today, it’s about creating a more affordable pathway for millions of aspiring students who dream of earning college degrees and achieving the American dream—that’s exactly what the Biden-Harris Administration has fought to do since day one.”
A press release was published by the Department of Education announcing the launch of the application as well as the launch of a new nationwide outreach campaign called “SAVE on Student Debt.”
“The SAVE plan is a sea change for students, making college loans far more affordable than ever before,” said Under Secretary James Kvaal. “It will cut payments to zero for borrowers making roughly $15 an hour, save all other borrowers at least $1,000 a year compared to other income-driven repayment plans, and stop runaway interest that leaves folks owing more than their initial loan. We are launching the ‘SAVE on Student Debt’ campaign in partnership with leading grassroots groups across the country to help as many borrowers as possible enroll in the SAVE plan and get additional support and resources for their federal loans.”
In addition, Federal Student Aid published electronic announcement (LOANS-23-07) regarding the new SAVE plan: “Loan Servicing Information – Availability of Saving on a Valuable Education (SAVE) Plan and Updates to the Income-Driven Repayment Plans.”
Under the SAVE plan, a single borrower who makes less than $15 an hour will not have to make any payments, and borrowers earning above that amount would save more than $1,000 a year on their payments compared to other IDR plans. The SAVE plan also ensures that borrowers never see their balance grow due to unpaid interest as long as they keep up with their required payments. Additionally, the new IDR application takes just 10 minutes or less to complete, and it allows borrowers to choose to have their income accessed securely from the Internal Revenue Service and automatically recertified every year, so most do not need to reapply annually. This new feature will prevent borrowers from missing their required annual IDR recertification.
Borrowers applying for the SAVE plan will see their new payment amount before submitting their application. Most borrowers who apply for the SAVE plan in the coming days can expect to have their new monthly payment amount for their first payment in October.
Sources & Resources:
- PRESS RELEASE: Biden-Harris Administration Launches Most Affordable Repayment Plan Ever, Transforming Income-Driven Repayment by Cutting Undergraduate Payments in Half and Preventing Unpaid Interest Accumulation
- (LOANS-23-07) Loan Servicing Information – Availability of Saving on a Valuable Education (SAVE) Plan and Updates to the Income-Driven Repayment Plans
- SAVE On Student Debt Campaign
- SAVE PLAN Announcement page
- Income-Driven Plans
- SAVE Plan Repayment Fact Sheet
- Return to Repayment Checklist