Aug. 22 (UPI) — The White House said Tuesday that its new college student loan repayment plan will decrease monthly loan payments for more than 20 million borrowers if their debt is not forgiven altogether.
The Biden administration’s Saving on a Valuable Education Plan applies to borrowers with direct subsidized and unsubsidized loans, as well as Direct PLUS loans for graduate and professional students, and direct consolidation loans, senior administration officials said.
Some borrowers with older loans must first consolidate them into a direct consolidation loan to be eligible for the new plan, officials said.
“The Biden-Harris Administration believes that education beyond high school should unlock doors to opportunity, not leave borrowers stranded with debt they cannot afford,” the administration said in a statement on the Education Department’s website.
“That’s why from day one we have been working to fix the broken student loan system, make college more affordable, and strengthen oversight and accountability of postsecondary institutions.”
In a video released on Tuesday, Biden called SAVE, the “most affordable student loan program ever.” He said lowering a previous threshold of borrowers paying 5% of the discretionary fund on paying back the loans instead of 10% will have the average borrower about $1,000 a year.
He said those making under $30,000 will not have to start paying until their annual pay tops that figure. The Biden administration said it plans to hold institutions accountable for unaffordable student debts incurred.
The White House said it recently proposed regulations that would set standards for earnings and debt outcomes for career programs while enhancing transparency for all programs to give students the information they need to make informed choices.