President Joe Biden's Department of Education launched its "beta" application for student debt relief under the new Saving on a Valuable Education plan.
CNBC reported Monday that the DOE's new SAVE Plan is "an income-driven repayment plan for student borrowers that could cut monthly payments in half," and possibly leave some without a bill.
The report said borrowers can apply now for the program before payments restart in October.
While current repayment programs go down to 10% of discretionary income, the new plan could reduce that to just 5%, and zero for those earning less than $15 per hour.
"The SAVE plan is very generous to borrowers, almost like a grant after the fact," higher education expert Mark Kantrowitz told CNBC.
The report said that reducing the amount of discretionary income relied on for the repayment will not officially take effect until next July due to the regulatory process.
However, those who apply for the program now will have their applications processed before payments resume this fall.
The U.S. Supreme Court rejected the administration's earlier attempt through an executive order to forgive up to $20,000 of student debt in June, costing an estimated $400 million, the New York Times reported.
Along party lines, the 6-3 decision rebuked a Biden 2020 campaign promise to address the student debt issue, finding that his order based on the COVID-19 national emergency overreached his authority without Congressional approval.
"The secretary's plan has 'modified' the cited provisions," the Times reported that Chief Justice John Roberts wrote in the majority opinion, quoting an earlier opinion, "only in the same sense that 'the French Revolution "modified" the status of the French nobility' — it has abolished them and supplanted them with a new regime entirely."
Not to be deterred, Biden immediately said he would seek another avenue to provide the relief.
"Today's decision has closed one path," the Times reported Biden saying following the decision, adding that he had directed his education secretary to examine a different law by which his administration could forgive the debt. "Now we're going to pursue another."
On the agency's website, it estimated the new plan will increase the amount of borrower income saved as related to federal poverty guidelines.
"The amount of income protected from payments on the SAVE plan will rise from 150% to 225% of the federal poverty guidelines (FPL). This change means a single borrower who earns less than $32,805 a year ($67,500 for a family of four) will not have to make payments," the agency's website said.
© 2025 Newsmax. All rights reserved.