The Biden admin has a new plan to address student loans

The Biden administration is pivoting to a second strategy aimed at reducing the amount of federal student-loan debt held by Americans, after the Supreme Court struck down its initial loan forgiveness plan in late June. As they say – if at first you don’t succeed, try, try again.

🎓 How the new plan works… On Sunday, the Education Department launched a beta website for a new income-driven repayment program called Saving on a Valuable Education (SAVE), which contains more than a dozen student-loan policy changes scheduled to take effect over the next year.

These include plans to:

• Eliminate all interest as long as borrowers are making regular payments.
• Forgive the debt of borrowers with principal balances of $12,000 or less following 10 years of regular payments; this period rises by one year for each additional $1,000.
• Increase the amount of exempt income from 150% of the poverty line to 225%; this means single borrowers earning less than $32,800 (or families of four earning less than $67,500) aren’t required to make any loan repayments.

✋ Yes, but: The plan will cost taxpayers an estimated $475 billion over the next decade, per UPenn Wharton, meaning it’s actually more expensive than Biden’s initial $400 billion student-loan forgiveness plan the Supreme Court rejected.

Along with the high price tag, Republican lawmakers have also criticized the SAVE program as “deeply unfair” to the 87% of Americans who don’t have student loans, as well as an overreach of presidential authority that'll likely be struck down in court.