In a major step toward reforming student debt, the Biden-Harris administration announced the launch of the Saving on A Valuable Education (SAVE) plan. The initiative aims to substantially reduce the financial burden of student loans and will be the most affordable repayment plan ever implemented, according to an Aug. 22 Department of Education news release.
"The SAVE plan is another huge step forward in President Biden's tireless efforts to fix the broken student loan system, reduce the burden of student debt on working families and put borrowers first," U.S. Secretary of Education Miguel Cardona said in the release.
The SAVE plan is expected to be the most affordable student loan repayment plan ever, aimed at cutting undergraduate payments in half and preventing unpaid interest accumulation, the release reported. A single borrower earning less than $15 an hour will not have to make any payments, while others will save more than $1,000 a year compared to existing income-driven repayment plans.
In addition to the launch of the SAVE plan, the U.S. Department of Education is rolling out a nationwide outreach campaign called SAVE on Student Debt, in collaboration with various grassroots organizations. The campaign aims to support borrowers by leveraging strategic partnerships across public, private and nonprofit sectors, the release said.
The Biden-Harris administration has already canceled more than $116 billion in student loan debt for 3.4 million borrowers, according to the release. The SAVE plan builds on these efforts, estimated to provide a $0 payment for more than 1 million additional low-income borrowers and a significant reduction in payments for those with the lowest projected lifetime earnings.
Moreover, the release elaborated on the plan's benefits for diverse groups, emphasizing that on average, Black, Hispanic, American Indian and Alaska Native borrowers will see their total lifetime payments per dollar borrowed cut in half, the release reported.
To ensure effective implementation and outreach, a series of public-private partnerships with organizations such as Civic Nation, the NAACP, the National Urban League and Young Invincibles is planned. These partnerships are aimed at supporting borrowers and ensuring widespread enrollment in the SAVE plan, the release said.
