Everything you need to know about Biden’s new student loan repayment plan
Plus: An exclusive interview with the leader of a grassroots group the White House is partnering with to spread the word.
SAVE UP • The Biden administration just announced the full launch of the SAVE plan, an income-driven repayment program it calls the most affordable of its kind ever created.
How it works: Under the SAVE plan, borrowers with undergraduate loans will have their payments reduced from 10 percent to five percent of their discretionary income.
If you have undergraduate and graduate loans, your payment will be weighted on average between five and 10 percent of your income based upon the original principal balances of the loan. The typical borrower is expected to save $1,000 per year on the plan.
Go to studentaid.gov/SAVE to submit an application, which will take around 10 minutes to complete. The White House is encouraging borrowers to sign up now to lower their monthly payments before payments restart this fall.
The result: The Education Department says SAVE will bring many borrowers’ payments to $0 per month and prevent borrowers from seeing their payments grow as long as they keep up with their required payments. The Education Department adds that the program will provide early forgiveness after 120 payments or around 10 to 12 years of repayment for low-balance borrowers. These benefits are targeted at low- and middle-income borrowers, community college students, and borrowers who work in public service.
How we got here: In one of its final decisions of the 2022 term, the Supreme Court in June overturned President Joe Biden’s plan to cancel up to $20,000 of student loan debt for eligible borrowers.
The president immediately announced new actions, including a rulemaking process to open an alternative path to debt relief for working- and middle-class borrowers plus a one-year on-ramp to protect borrowers from dings to their credit score for late, missed, or partial payments. Biden also rolled out the SAVE plan and promised it would be operational by the end of summer.
“On day one of my administration, I promised to fix the problems of the existing student loan program that hurt borrowers for much too long,” President Biden said in a video announcing the SAVE application. “And I’m proud we’re keeping that promise.”
The administration says SAVE is about making college more affordable going forward too.
“SAVE isn’t just about helping borrowers today,” Education Secretary Miguel Cardona said in a statement. “It’s about creating a more affordable pathway for millions of aspiring students who dream of earning college degrees and achieving the American dream.”
👋🏾 HI, HEY, HELLO! Good Tuesday morning. It’s August 22, 2023. Thank you for reading Supercreator Daily, your guide to the politicians, power brokers, and policies shaping the American creator experience. Get in touch: michael@supercreator.news.
Spreading the word: In addition to the SAVE launch, The Education Department also announced a partnership with grassroots organizations to encourage borrowers to sign up for the SAVE plan—including Civic Nation, the NAACP, the National Urban League, Rise, the Student Debt Crisis Center, and UnidosUS.
Another organization the administration is collaborating with is Young Invincibles, an advocacy group focused on economic empowerment for young people.
“We are the voice of young adults. We were founded by young adults and we continue to advocate with and on behalf of young people,” Kristin McGuire, executive director of Young Invincibles, said to Supercreator News. “We bring the ability to take really complex policy situations and translate them into consumable pieces so that young people can not only understand what’s happening but engage in what’s happening.”
Supercreator News hopped on Google Hangouts to chat with McGuire about why Young Invincibles joined the outreach campaign, the difference between repayment and cancelation, the role of creativity in her work, and what you should do if you’re represented by politicians who oppose student debt relief. The conversation has been edited for length and clarity.
Supercreator News: Can you share the backstory on why Young Invincibles decided to partner with the administration on this campaign?
Kristin McGuire: Young Invincibles has been advocating for student debt cancellation for about a decade now. And we were very pleased to have a president who not only listened to us but acted in his authority to cancel the debt. And the debt cancellation that he proposed was 100 percent legal, but unfortunately, the Supreme Court had to act in a partisan way and not allow debt cancellation for millions of Americans.
With that being said, Young Invincibles is an organization that is dedicated to creating economic opportunity for young adults. So we have always provided consumer education for young adults across all of our issue areas so that people can make the best decisions for themselves when it comes to their personal finances. We always knew that we were going to do consumer education around student debt repayment once [it] became a reality.
I don’t want this to be conflated with being a plan B for debt cancellation. These plans are not debt cancellation. These are repayment plans.
How would you explain the difference between repayment plans and student debt cancellation?
So there are a lot of things happening right now.
What we have is the [income-driven repayment] account adjustment, which basically means you've been in repayment for a while and you’ve hit a minimum amount of payments and the Department of Education is adjusting your account to count those payments towards income-driven repayment.
It gets a little wonky, but there’s a program called Public Service Loan Forgiveness that if you work in public service—if you are a police officer, a teacher of fire person, a person who works for a qualifying nonprofit—if you make 120 payments while being employed at one of these types of agencies, your balance can be forgiven through public service loan forgiveness because you dedicated a portion of your career to public service.
Now, what had been happening in the previous administration, is that when you got to those 120 payments, the previous administration was still not honoring the application for forgiveness. They were like, “That’s great, thanks, goodbye.” So President Biden said, “Well, let’s try this thing.” And he did a waiver saying if you've ever worked at qualifying places, fill out this waiver by October 31 last year and we’ll update your account.
Yeah, we covered the PSLF waiver deadline in Supercreator last year.
Right. So now since that was done, the accounts are starting to be adjusted, people are being forgiven and canceled and the program is working as it should have been working.
Why we say that all these other things are not a Plan B is because we are absolutely still advocating for [the] student debt cancellation [the Supreme Court blocked].
What the president has now stated is that we will go through a process called negotiated rulemaking, which is a Department of Education practice process where we look at different rules and regulations and how we can create debt cancellation from the different rules and acts within the Higher Education Act. And so that's what we're doing now.
The votes currently aren’t there in Congress to send a bill to President Biden’s desk to cancel student debt as he tried to do through executive authority. Are you resigned to the fact that there may not be a path forward in terms of congressional action?
Oh, no, Michael, there's always a path forward.
I think that we are very confident in the negotiated rulemaking process. We are committed to seeing that process all the way through, but everything’s still on the table.
And when we talk about the power and diversity of young adults, I think what's important is that we know that young adults are also one of the largest voting blocs we have coming through. So I do believe even if this is a much longer strategy, and we end up having to go a legislative route, we will get our desired outcome. But right now, I have full faith in the negotiated rulemaking process.
Borrowers are busy and sometimes it’s hard to break through the noise to reach them. What’s the role of creativity in the work that you and your team at Young Invincibles do to reach people where they are?
When we think about creative problem-solving, really leaning into knowing that a lot of our lawmakers have been doing this for a really long time. So they’re used to doing things the same way all the time.
And so we’re really able to utilize our narrative-shift skills and our power of your personal story to kind of switch how these legislators think traditionally about their work and start to change some of these long-held beliefs.
I think between our storytelling, social media, and inclusion of the arts in our work, we really have something that folks can feel engaged with and where they can utilize their different skills and talents.
Two-part question: What’s your message to lawmakers who may oppose student debt cancelation and what’s your advice to readers who live in states and districts represented by elected officials who are against the policy?
We are voters and we are constituents and we need to get out of the thought that we are helpless or we are not partners in policy in our communities.
We have to hold our elected representatives accountable. Your city hall, your state building, and even the congressional offices are open to the public so that we can have these conversations with our elected officials. They are able to hold these long-standing beliefs or disbeliefs because no one challenges them.
Even if there is an elected official who doesn’t hold the same viewpoints as we do, it doesn’t mean avoid their office—it actually means go there more often. Tell them the stories of your community, tell them your personal story. Let them know how their decisions impact your day-to-day life. And that’s what we should be doing.
HAPPENINGS
All times Eastern
2 p.m. The House and Senate will meet in separate pro forma sessions.
President Biden is in Lake Tahoe, Nevada and has no public events scheduled.
Vice President Harris and Second Gentleman Doug Emhoff will be in Washington, DC and have no public events scheduled.
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