The Biden administration launched a long-awaited website Tuesday that will allow student loan borrowers to apply for the administration's modified income-driven repayment program.
The Saving on a Valuable Education, or SAVE, plan modified the existing rules on income-driven repayment so that borrowers who qualify for the program now make smaller monthly payments and are eligible for loan forgiveness more quickly.
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Under the previous regulations, borrowers in an income-driven repayment plan had to make payments commensurate with 10% of their discretionary income above $30,000 and could be eligible for loan forgiveness after 20 years. Now, the requirements have been modified to allow borrowers to pay 5% of their discretionary income and can begin qualifying for loan forgiveness after 10 years, depending on the size of their balance.
President Joe Biden announced the website, studentaid.gov/save, in a video announcement on Monday. He touted his administration's efforts to change the federal student loan program and forgive loans.
"On Day One of my administration, I promised to fix the problems and existing student loan program that hurt borrowers for much too long," Biden said, "and I'm proud we're keeping that promise. We've already approved over $116 billion in debt cancellation for 3.4 million Americans, no matter how many lawsuits, challenges, or roadblocks Republican elected officials or special interests trying to put in our way."
Eligible borrowers can apply for the income-driven repayment program on the website. Federal student loan payments have been paused since March 2020 but are set to resume next month.
"As long as I am president, my administration will never stop fighting to deliver relief to borrowers and bring the promise of college to more Americans," Biden said, "and that’s a commitment."
The president has taken a number of steps to forgive student loans during his 2 1/2 years in office, with mixed results. The administration most famously attempted to cancel up to $20,000 in student loans for borrowers with an annual salary of $125,000 or less. That plan was struck down by the Supreme Court in June.
The administration has already forgiven student loans for hundreds of thousands of borrowers through adjustments to the income-driven repayment program and the public service loan forgiveness plan. The administration also settled a lawsuit by forgiving loans for borrowers who attended a number of for-profit colleges and claimed they had been defrauded.
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The Job Creators Network, which had challenged the administration's previous loan forgiveness plan, decried the latest program in a statement Tuesday as an attempt to defy the Supreme Court's ruling and a "staggering" example of "executive overreach."
"While different in style, this bailout plan has little difference in substance from the student loan bailout program the Supreme Court struck down," the organization's president and CEO, Alfredo Ortiz, said. "Millions of borrowers will see their debts forgiven, and millions more will face only de minimus payments before their balances are paid by taxpayers. Besides its lawlessness, this student loan bailout fails to address — and, in fact, exacerbates — the underlying reason for this debt crisis: unaccountable colleges that overcharge students."