Biden Administration Proposes SAVE Plan

President Biden's latest plan for student debt relief is the SAVE Plan, a major part of which looks to increase the income exemption from 150% to 225% of the poverty line, allowing qualified buyers to pay 0% of their income level. Partner Mark Welsh said the Department of Education would no longer charge interest on the debt, preventing it from growing.

That is only one of four goals for the SAVE Plan. On the second, Welsh said, “The plan [is] to eliminate 100% of remaining interest for both subsidized and unsubsidized loans after a scheduled payment is made under the SAVE Plan."

For Summer 2024, he said the final two phases of the SAVE plan are scheduled to go into effect: the first will cut undergraduate loan payments in half (10% to 5%) for people above the income exemption, and the second will allow borrowers with original principal balances of $12,000 or less to receive loan forgiveness on the remaining balance after making 10 years of payments. For every $1,000 over $12,000 on the original principal balance, repayers will have an additional year added to their maximum repayment period. Payments made prior to 2024 will count toward the repayment forgiveness timeframe.

Read the full article published by WMDT.