Borrowers who are struggling with their federal student loans now have the option to significantly reduce their payments through the Biden administration’s new income-driven repayment plan, known as SAVE. The plan, which opened for enrollment on Tuesday, aims to provide a more affordable way for millions of borrowers to repay their student loans. The plan is based on income and family size, and offers the promise of affordable payments and reduced interest rates.
Over 30 million borrowers will be invited to enroll in the SAVE plan in the coming days. Unlike the previous plan to cancel up to $20,000 in federal debt, which was struck down by the Supreme Court, the SAVE plan will become a permanent option for current and future borrowers. It also includes a safety net that automatically enrolls certain borrowers into the program if they fall behind on payments.