Student Loan Payments Canceled for Some Low-Income Borrowers Under New Biden Plan
- Administration’s SAVE plan focuses on low-income debt holders
- Some borrowers should save around $1,000 per year on payments
Expiring relief means a further stress on big consumer spending decisions.
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The Biden administration will start accepting applications Tuesday for a new income-driven repayment plan, a fresh effort to shore up student loan borrowers facing a cliff as pandemic-era benefits end.
The so-called Saving on a Valuable Education, or SAVE, plan is meant to disproportionately focus on low-income borrowers, calculating payments based on income and family size rather than loan balance. Officials said many borrowers’ monthly payments will be reduced to nothing, while others should save around $1,000 per year.