The Department of Education has started the process of enrolling student loan borrowers into its Saving on a Valuable Education (SAVE) plan, just weeks after the U.S. Supreme Court quashed the Biden administration’s attempt to forgive billions of dollars in student loans.
SAVE is an Income-Driven Repayment (IDR) plan.
“A beta version of the updated IDR application is now available and includes the option to enroll in the new SAVE Plan—the most affordable repayment plan yet,” says the Student Aid website. “We’re accepting applications now to help us refine our processes ahead of the official launch. If you submit an IDR application now, it will be processed and will not need to be resubmitted.”
“The application may be available on and off during this beta testing period. If the application is not available, try again later. You will receive an email confirmation after you have applied.”
On June 30, the U.S. Supreme Court voted in a 6–3 decision to strike down the Biden administration’s controversial student loan forgiveness plan, which would have canceled as much as $20,000 for around 40 million borrowers, resulting in a massive $800 billion tax-payer commitment.
Following the SCOTUS ruling, Mr. Biden promised he would pursue a “new way” to circumvent the decision. On the same day as the ruling, the Department of Education (DOE) announced the SAVE plan.
At present, the DOE offers four Income-Driven Repayment plans for students to pay off their debts—Revised Pay As You Earn Repayment Plan (REPAYE Plan), Pay As You Earn Repayment Plan (PAYE Plan), Income-Based Repayment Plan (IBR Plan), and Income-Contingent Repayment Plan (ICR Plan).
The SAVE plan is intended to replace the REPAYE plan, which is one of the most widely used of the four existing plans. The remaining three will be phased out or limited by the DOE.
Borrowers who are already enrolled in the REPAYE plan or recently applied for it will automatically be transferred to the SAVE plan. There is no need to reapply for such borrowers.
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