Just under 100,000 Bay Staters are enrolled in the federal government's SAVE Plan to pay back student debt, according to new data released Wednesday by the Biden-Harris Administration.
The Saving on a Valuable Education Plan is an income-driven repayment plan that replaced the REPAYE Plan this summer. There were nearly 5.5 million borrowers enrolled nationwide as of Oct. 15, according to Tuesday's announcement. Enrollment has grown by 60% since SAVE replaced REPAYE in the summer.
Education officials touted the number of people who have a $0 monthly payment under the plan — which is 2.9 million borrowers. Everyone else is saving a little over $100 per month compared to the REPAYE plan, according to the Biden Administration.
People who have a $0 monthly payment are individuals who make less than $32,800 and people in families of four making less than $67,000.
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“Under President Biden, the Department created the SAVE Plan so that young people and working families can climb the economic ladder without unaffordable student loan debt weighing them down,” U.S. Secretary of Education Miguel Cardona said in a news release. “I’m thrilled to see that in less than three months, nearly 5.5 million Americans in every community across the country are taking advantage of the SAVE Plan’s many benefits, from lower monthly payments to protection from runaway student loan interest. The Biden-Harris Administration will not rest in its efforts to fix the broken student loan system and make paying for college more affordable.”
The SAVE plan is using a smaller piece of borrowers' adjusted gross income to calculate monthly payments, which is why it lowers payment amounts for almost everyone who uses it, according to the Department of Education. For borrowers whose payments don't cover monthly interest, the plan covers the remaining interest so the loan balance does not increase.
“The SAVE Plan will significantly cut monthly bills for most borrowers, reduce loan default, and ensure that students loans don’t need to come before life necessities,” said Under Secretary James Kvaal. “With nearly 5.5 million people enrolled after only two months, it’s clear how much borrowers need a plan like SAVE. President Biden and our Administration remain committed to giving borrowers breathing room on their monthly payments and ensuring student loans aren’t a barrier to opportunity.”
The SAVE Plan was launched in the summer of 2023; expanded benefits are expected to hit in summer 2024, including the further lowering of payments for borrowers with undergraduate loans, education officials said.
More information for borrowers interested in the SAVE program is available here.
