Saving on a Valuable Education (SAVE), the federal administration’s newest student loan repayment plan for student borrowers, has been open for enrollment since August, ahead of federal student loan payments resuming in October.
The SAVE plan is open to any student borrower with a direct loan in good standing, along with subsidized, unsubsidized, and consolidated loans. Repayment amounts will be based on income and family size, instead of total student loan balance.
Generally, loan payments will be set at 10% of discretionary income each month under the SAVE plan, lowering the monthly payment. Discretionary income is the amount of money remaining after essential bills, such as rent, groceries, and utilities, are paid.
SAVE was created in response to the Supreme Court’s decision to strike down the White House’s previous student loan forgiveness plan in June. The strike on the plan blocks millions of loan borrowers from receiving amounts up to $20,000 of student loan relief.
According to a White House Fact Sheet, “The Biden-Harris Administration believes that education beyond high school should unlock doors to opportunity, not leave borrowers stranded with debt they cannot afford.”
The Fact Sheet describes The SAVE plan as a part of the Biden-Harris Administration’s efforts to address student loan debt, and the most affordable payment plan ever created.
Though the SAVE plan is being implemented and borrowers are currently enrolling, Republican lawmakers introduced a resolution to overturn SAVE, arguing the cost to taxpayers is too great. Introduced under the Congressional Review Act, the resolution would cause SAVE to have “no force or effect” under the law.
Student Loans in Ohio
Leo Kenealy, President of Cleveland State College Democrats, explained that the organization supports the SAVE plan.
“It will help create economic equity and provide economic assistance for those borrowers who need it,” Kenealy said.
Many Ohioans could benefit from the SAVE plan as college graduates in Ohio averaged to have $30,047 in student loan debt that was reported in 2019 from LendEDU.
How to Enroll in SAVE
The Federal Student Aid website has an open application for the SAVE repayment plan.
Borrowers typically can switch repayment plans whenever they decide to, though it may take around four weeks for a loan servicer to process an income-driven repayment plan application.