With regulations fully going into effect in July 2024, the Biden-Harris administration just dropped the most affordable loan-repayment plan to date. It’s called SAVE, or the Saving on A Valuable Education plan.
The SAVE plan isn’t the first of its kind, calculating debt repayment amounts based on income. However, one major difference is that SAVE significantly increased the income exemption from 150% to 225% of the poverty line, according to Federal Student Aid.
“That means you will not owe loan payments if you are a single borrower earning $32,800 or less, or a family of four earning $67,500 or less,” reports the Federal Student Aid.
In addition, SAVE completely eliminated the remaining interest on unsubsidized and subsidized loans. If you make monthly payments on time, you will now only pay what you initially borrowed, and will no longer be kept in a state of perpetual debt due to interest.
With the cost of living increasing faster than most people can keep up with, I think this is a great step towards making education accessible to everyone.
Forbes reports that in the United States, “more than half of students leave school with debt,” with California having an average loan balance of $36,755.80.
Realistically, finances are one of the first things students look at when choosing where to attend college. These big decisions can determine where students’ lives are headed and are typically made based on factors out of many students’ control.
Education shouldn’t be a privilege that only a few people have access to. Education, especially in a country like the United States, should be accessible to anyone who wishes to pursue it.
Regardless of ethnic background, language level or financial status, education brings people together. It is a way to experience new things from the comfort of a classroom and a blessing that everyone should be able to experience.
To learn more about the pros and cons of this program, check out Berkeley Law’s summary of SAVE.