White House announces $1.2 billion in student debt relief: Eligibility for the SAVE program

Last year, the Supreme Court struck down Presidnet Biden’s proposal to forgive up to $20,000 in student debt for millions of borrowers. After that, the White House continued implementing smaller, more focused student debt relief programs. One is the Saving on a Valuable Education (SAVE) repayment plan.

On Tuesday, 20 February, the Biden administration announced that 153,000 borrowers would have their debt canceled through a program totaling $1.2 billion. To date, $138 billion has been approved, benefiting almost four million borrowers. Furthermore, nearly four million borrowers will be affected, as another $138 billion will be canceled through a series of executive actions.

Details on the SAVE program

The White House has announced a new Income-Driven Repayment (IDR) plan called the Saving on a Valuable Education (SAVE). Despite not being supported by the Supreme Court, the SAVE plan will replace the Revised Pay As You Earn (REPAYE) plan and is said to be “the most affordable repayment plan in history.”

The SAVE plan aims to reduce monthly payments for borrowers and even eliminate them for those who meet specific income criteria. Additionally, the plan will stop unpaid interest from accumulating if payments are made on time. The SAVE plan is expected to shorten the duration of monthly payments, which could lead to as much as 85% of community college borrowers having their debt canceled within just 10 years.

Eligibility and enrolling in SAVE

According to the US Department of Education, borrowers “have been making at least 10 years of payments” on loans worth up to $12,000. Those who took out more than $12,000 will have to tack on an additional year of payments for every $1,000 added to their loan balance. The application process takes around 10 minutes. The government has introduced a new plan for student loan repayment, which is income-driven. The site for the program has been launched, and borrowers can start submitting their applications through it. You will automatically be transitioned to the SAVE program if you are already registered under the REPAYE program. If you are not currently on any IDR plan, you can apply for one and select REPAYE if you wish to enroll in the SAVE plan.