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Biden-Harris Administration Reveals Over 5.5 Million Borrowers Currently Enrolled in the SAVE Plan
The Biden-Harris Administration has released new data indicating that there are now almost 5.5 million borrowers taking part in the Saving on a Valuable Education (SAVE) Plan. Of these, 2.9 million have zero payments. Other participants in the SAVE Plan are saving an average of $102 per month ($1,224 per year) compared to what they would have paid under the Revised Pay As You Earn (REPAYE) Plan. Since it replaced the REPAYE Plan earlier this year, enrollment in the SAVE Plan has increased by 60%. The latest figures are based on enrollments as of October 15, 2023.
“Our goal is to provide young people and working families with a way to advance economically without being burdened by unaffordable student loan debt,” stated U.S. Secretary of Education Miguel Cardona. “It’s exciting to see that in less than three months, almost 5.5 million Americans from all walks of life are benefiting from the SAVE Plan’s numerous advantages, such as lower monthly payments and protection from excessive student loan interest. The Biden-Harris Administration remains committed to addressing the flaws in the student loan system and making college more affordable.”
The revised SAVE enrollment data includes 1.8 million borrowers who are new to an income-driven repayment (IDR) plan and 364,000 who have switched to the SAVE Plan from a different IDR plan since September 2023. Overall, participants in the SAVE Plan are repaying $300 billion in federal student loans, representing about a quarter of all Direct Loans currently in repayment, deferment, or forbearance.
Compared to the previous REPAYE plan, the SAVE Plan offers significant savings for borrowers. The majority of SAVE participants have zero payments, while those who still have monthly payments are saving an average of $102 per month ($1,224 per year). These savings provide real relief to borrowers and their families, particularly those who are disproportionately affected by student debt, such as borrowers of color and low-income borrowers. Additionally, borrowers benefit from not being charged monthly interest on unpaid amounts. These advantages are especially important considering that 75% of SAVE borrowers also receive Pell Grants, which are provided to low-income college students.
Under the SAVE Plan, single borrowers who earn less than $32,800 per year or individuals in a family of four with an annual income below $67,000 have no payment obligations. The SAVE Plan also guarantees that a borrower’s loan balance will never increase due to unpaid interest as long as monthly payments are made. The improved IDR application process enables borrowers to securely provide their income information through the Internal Revenue Service, eliminating the need to recertify income or reapply for IDR plans annually. The savings for borrowers will increase even further when the Department of Education implements additional payment reductions for undergraduate loans next year and introduces earlier loan forgiveness for smaller loans.
Alongside this announcement, the Department of Education is publishing data on the number of borrowers enrolled in the SAVE Plan by state and congressional district. California and Texas have over 450,000 borrowers each participating in the SAVE Plan, and congressional districts in Missouri, Ohio, and Michigan have the highest levels of enrollment. The data shows that there are SAVE Plan participants in all congressional districts. The data can be accessed here.
The SAVE Plan builds on the Biden-Harris Administration’s efforts to alleviate the burden of student debt on American families. To date, the Administration has granted $127 billion in targeted relief to approximately 3.6 million borrowers. The Administration is currently proposing revisions to regulations that would expand eligibility for loan forgiveness, and it has recently finalized regulations to establish the most robust accountability system ever for colleges that leave students with unaffordable debts.
“The SAVE Plan will significantly reduce monthly bills for most borrowers, decrease loan default rates, and ensure that student loans do not hinder basic necessities of life,” explained Under Secretary James Kvaal. “With almost 5.5 million individuals enrolled in just two months, it’s evident how much borrowers need a plan like SAVE. President Biden and our Administration remain dedicated to providing borrowers with financial flexibility in their monthly payments and ensuring that student loans are not a barrier to opportunity.”