“It’s the most affordable student loan plan ever,” President Biden said in a video Tuesday.
The president said his administration “will never stop fighting to deliver relief to borrowers and bring the promise of college to more Americans.”
The dubbed Saving on a Valuable Education (SAVE) plan will have a two-phase rollout, as some of the program will be implemented this year and other aspects will not go into effect until July 2024.
This year, the income exemption for monthly payments will be raised from 150 percent above the poverty line to 225 percent.
More borrowers will qualify for $0 monthly payments under this plan.
An individual borrower making up to $32,800 per year and a family of four making less than $67,500 per year will have $0 monthly payments.
The federal government says the number of borrows eligible for those payments will total 1 million.
The official launch comes just weeks before interest will begin to accrue on student loans for the first time in more than three years in September.
- Borrowers can visit a page on the Federal Student Aid website and find a quick application process that takes around 10 minutes to complete.
- Some information that may be difficult for borrowers to find for the application, such as tax returns, can automatically be inserted by the department.
Repayments will resume in October, although no financial consequences other than interest will come to borrowers if they are unable to pay for up to a year.
“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 Education Secretary 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.”
Multiple other changes will occur next July, such as cutting monthly payments from 10 percent to 5 percent of a person’s discretionary income for undergraduate loans.
The new program comes after the Supreme Court over the summer struck down the Biden administration’s plan to forgive up to $20,000 of student debt per borrower.
The Hill’s Lexi Lonas digs further here.
