– The Biden administration has introduced a student loan repayment plan called the SAVE Plan, offering lenient terms and reducing monthly payments for millions of Americans.
– The plan aims to prevent interest accumulation as long as borrowers make regular payments, and any remaining debt can be canceled after as little as 10 years.
– The SAVE Plan has gained attention after the Supreme Court struck down Biden's proposal for mass student loan cancellation.
– Biden's alternate approach focuses on the SAVE Plan, calling it "the most affordable repayment plan ever" and stating that borrowers can save $1,000 a month.
– Republicans have opposed the plan, claiming it exceeds the president's authority and is unfair to the majority of Americans who don't have student loans.
– The plan is a new income-driven repayment plan that lowers payments further than existing options, replacing them gradually.
Changes will include eligibility for $0 payments for those earning less than 225% of the federal poverty line
– preventing interest accumulation, capping undergraduate loan payments at 5% of discretionary income, and providing a quicker road to loan forgiveness.
– The Education Department will notify borrowers when the application process launches, and borrowers in an existing plan will be automatically moved into the SAVE Plan.
– Supporters believe the plan simplifies repayment options and provides relief to borrowers, while opponents argue it unfairly burdens taxpayers and resembles a form of free college.
– The plan's legality is a subject of debate, but it hasn't been challenged in federal court yet.