Student Loans: What President Biden’s new “SAVE” plan means for borrowers

ORLANDO, Fla. — Weeks after the U.S. Supreme Court shot down a plan to forgive student loan debt, the White House is out with a new program to ease the burden on those struggling with thousands of dollars in loans.

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President Joe Biden’s administration is calling the program the Saving on a Valuable Education plan, or simply SAVE.

The plan calculates a monthly payment amount based on the borrower’s income and family size, providing the lowest monthly payments possible.

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Borrowers who are single earning $32,800 per year or less, or a family of four earning $67,500 per year will not owe loan payments.

Borrowers earning more than those amounts will save at least $1,000 a year on payments.

The SAVE plan regulations will go fully into effect on July 1, 2024, but the Department of Education is planning to implement three critical benefits by September 1 of this year.

Those benefits include an increase in the income protection threshold from 150 percent to 225 percent of the federal poverty guidelines, meaning more borrowers will qualify for no monthly payment.

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The second critical benefit reduces the payment cap for undergraduate loans from 10 percent to 5 percent of discretionary income, saving borrowers money on their monthly payments.

The third critical benefit the Biden Administration hopes to implement as soon as September is an elimination of all remaining interest after a scheduled payment is made under the SAVE plan, which will help borrowers pay off their loans faster.

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