Biden's Student Loan Plans: Implications and Overreach

The Biden administration has introduced a new plan called the Saving on a Valuable Education (SAVE) plan to address student loan debt. Under this plan, payments on undergraduate loans will be reduced to 5% of incomes above 225% of the federal poverty level. Loan balances will be forgiven after 10 years of payments for borrowers with original balances of $12,000 or less. The Department of Education will implement a 12-month "on-ramp" to repayment, during which missed payments will not have negative consequences. Borrowers will not be charged unpaid monthly interest, and those already enrolled in the Revised Pay as You Earn (REPAYE) plan will be automatically enrolled in SAVE. All student borrowers in repayment will be eligible to enroll in the SAVE plan.