The Biden Administration promised a plan B to student loan debt for millions of Americans after the Supreme Court said no to debt forgiveness.
Starting this summer, student loan borrowers can enroll in a new repayment plan that offers lenient terms and is called a “student loan safety net” by the administration. If borrowers make regular payments, interest will not accrue, according to the Associated Press. Millions will have monthly payments reduced to $0, and any remaining debt could be canceled in 10 years.
The SAVE Plan was announced last year. The average borrower will save $1,000 per month in payments. Republicans call it an overstep of Biden’s authority. Sen. Bill Cassidy, the ranking Republican on the Health, Education, Labor and Pensions Committee, said the plan is “deeply unfair” to the 87 percent of Americans who do not have student loans.
Borrowers who earn $32,000 a year or less will not be required to make payments.
In July 2024, borrowers whose initial balances were $12,000 or less will have their loans canceled after 10 years of payments.
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Rebecca Barnabi
