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Biden Administration Launches New Effort for Student Debt Relief

Elinor Rozenvasser Updated: July 17, 2023 • 3 min read

Key Points:

  • The Biden administration is launching the SAVE plan, a new student debt relief plan which will allow borrowers to reduce their monthly payments to zero dollars, cut their payments in half, or save at least $1,000 per year.
  • It is not yet clear when the SAVE plan will be finalized. However, the administration is committed to providing as much relief to as many borrowers as possible.
  • The administration is also launching the on-ramp program, a resource for financially vulnerable borrowers who are struggling to make their student loan payments. The program can help borrowers avoid the negative consequences of missed payments and give them some time to get their finances in order.
  • The on-ramp program will run from October 1, 2023 to September 30, 2024.

The Biden administration is launching a new plan to provide student debt relief after the Supreme Court struck down the president's original plan. The new plan, called the Saving on a Valuable Education (SAVE) plan, would allow borrowers to reduce their monthly payments to as low as $0, cut their payments in half, or save at least $1,000 per year.

Who Can SAVE?

To qualify for the SAVE Plan, borrowers must have federally held student loans. This includes Direct subsidized, unsubsidized, and consolidated loans, as well as PLUS loans made to graduate students. Parents who took out a federal PLUS loan to help their child pay for college are not eligible for the SAVE Plan. Borrowers with FFEL or Perkins Loans held by a commercial lender must consolidate their loans into a Direct loan to qualify for the SAVE Plan.

Benefits of the SAVE Plan

The SAVE Plan offers a number of benefits, including:

  • Lower monthly payments: Borrowers on the SAVE Plan can have their monthly payments as low as $0, depending on their income and family size.
  • Forgiveness after 20 or 25 years: Borrowers who make all of their payments on time under the SAVE Plan will have their remaining loan balance forgiven after 20 or 25 years, depending on the original principal balance of their loans.
  • Eligibility for Public Service Loan Forgiveness (PSLF): Payments made under the SAVE Plan count towards PSLF, which means that borrowers who work full-time in public service for 10 years can have their remaining loan balance forgiven.

Who Can Apply for the SAVE Plan?

Borrowers can apply to the SAVE Plan through the Federal Student Aid website. The application process is simple and straightforward, and most borrowers will be able to complete it online.

If you have private student loans, you will not be eligible for the SAVE plan or the on-ramp program. However, you may be able to refinance your loans for a lower interest rate to reduce your monthly payments.

"On-Ramp" Program for Those Liable for Financial Hardships

In addition to the SAVE plan, the administration is also launching an "on-ramp" repayment program. The new program will prevent financially vulnerable borrowers from being reported to credit bureaus, placed in default, or referred to debt collection agencies if they miss monthly payments.

  • The program will be available to borrowers with federal student loans who are in default or who are at risk of default.
  • Borrowers will be eligible for the program if they meet certain income and debt-to-income requirements.
  • The program is set to run for one year.

The on-ramp program will run from October 1, 2023 to September 30, 2024.

The administration's new efforts for student debt relief come as borrowers are facing a number of challenges, including rising interest rates and the upcoming end of the federal student loan payment pause. The Biden administration is committed to providing relief to student borrowers. The SAVE plan and the on-ramp program are two important steps in that effort.


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Elinor Rozenvasser is a content writer and editor with a knack for finance. She holds a Bachelor's in Communications and Business from Reichman University, and has been swimming alongside finance specialists for over a decade. She's not your typical financial writer, though. She's more likely to use witty puns and sarcasm than jargon and technical terms. But don't let that fool you. She's still a whiz when it comes to explaining complex financial concepts in a way that anyone can understand. If there's any writer who can make finance fun and engaging, Elinor is your girl. She's sure to leave you laughing (and learning) long after you've finished reading her work.