FACT SHEET: The Biden-Harris Administration Launches the SAVE Plan, the Most Affordable Student Loan Repayment Plan Ever to Lower Monthly Payments for Millions of Borrowers | The White House

President Biden Announces the SAVE Plan for Student Loan Repayment

Introduction

The Biden-Harris Administration believes that education beyond high school should unlock doors to opportunity, not leave borrowers stranded with debt they cannot afford. That’s why, from day one, President Biden and Vice President Harris have been working to fix the broken student loan system and make college more affordable. Today, the Biden-Harris Administration announced the official launch of the most affordable repayment plan ever created – the Saving on a Valuable Education (SAVE) plan and kicked off an outreach campaign to encourage eligible borrowers to sign up for the plan.

The SAVE Plan

The SAVE plan is an income-driven repayment (IDR) plan that calculates payments based on a borrower’s income and family size – not their loan balance – and forgives remaining balances after a certain number of years. The SAVE plan will cut many borrowers’ monthly payments to zero, will save other borrowers around $1,000 per year, will prevent balances from growing because of unpaid interest, and will get more borrowers closer to forgiveness faster. The SAVE plan builds on the actions the Biden-Harris Administration has already taken to support students and borrowers, including cancelling more than $116 billion in student loan debt for 3.4 million Americans.

Key Features of the SAVE Plan

• Cut payments on undergraduate loans in half.
• Bring many borrowers’ loan payments to $0 per month.
• Ensure that borrowers never see their balance grow as long as they keep up with their required payments.
• Provide early forgiveness for low-balance borrowers.

Benefits of the SAVE Plan

The benefits of the SAVE plan will be particularly critical for low- and middle-income borrowers, community college students, and borrowers who work in public service. Overall, the Department of Education estimates that the plan will have the following effects for future cohorts of borrowers compared to the IDR plan, called the Revised Pay-As-You-Earn (REPAYE) plan:

• Borrowers will see their total payments per dollar borrowed fall by 40%.
• A typical graduate of a four-year public university will save nearly $2,000 a year.
• A first-year teacher with a bachelor’s degree will see a two-third reduction in total payments, saving more than $17,000, while pursuing Public Service Loan Forgiveness.
• 85% of community college borrowers will be debt-free within 10 years because of the early forgiveness for low-balance borrowers provision of the plan.
• On average, Black, Hispanic, American Indian and Alaska Native borrowers will see their total lifetime payments per dollar borrowed cut in half.

Outreach Campaign

To encourage borrowers to sign up for the new SAVE plan, the Department of Education is partnering with grassroots organizations to launch an outreach campaign, “SAVE on Student Debt”. The campaign will leverage strategic partnerships across public, private, and nonprofit sectors to help borrowers take full advantage of the benefits provided by the SAVE plan, as well as ensure borrowers know about other resources and debt forgiveness programs available from the Department.

Broader Efforts to Deliver Relief to Student Loan Borrowers

The SAVE plan builds on broader actions by the Biden-Harris Administration to deliver relief to student loan borrowers, fix problems in the student loan system, and make college more affordable. To date, the Biden-Harris Administration has cancelled more than $116 billion in student loan debt for 3.4 million Americans.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 4: Quality Education
• SDG 10: Reduced Inequalities

The article addresses the issue of student loan debt and the need to make college education more affordable. This aligns with SDG 4, which aims to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all. Additionally, the article mentions the benefits of the SAVE plan for low- and middle-income borrowers, community college students, and borrowers working in public service, highlighting the goal of reducing inequalities (SDG 10).

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 4.3: By 2030, ensure equal access for all women and men to affordable and quality technical, vocational, and tertiary education, including university.
• Target 10.1: By 2030, progressively achieve and sustain income growth of the bottom 40 percent of the population at a rate higher than the national average.

The article emphasizes the need to make college education more affordable and accessible to all borrowers. This aligns with Target 4.3, which focuses on ensuring equal access to affordable and quality tertiary education. Additionally, the SAVE plan aims to reduce the financial burden on low- and middle-income borrowers, contributing to Target 10.1 of achieving income growth for the bottom 40 percent of the population.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 4.3.1: Participation rate in formal and non-formal education and training in the previous 12 months, by sex.
• Indicator 10.1.1: Growth rates of household expenditure or income per capita among the bottom 40 percent of the population and the total population.

The article does not explicitly mention specific indicators, but it implies the need to measure the participation rate in tertiary education (Indicator 4.3.1) and the growth rates of income or expenditure among low-income borrowers (Indicator 10.1.1) to track progress towards the identified targets.

Table: SDGs, Targets, and Indicators

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Source: whitehouse.gov

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