Democratic Senators Introduce Legislation to Codify SAVE Repayment Plan
By Maria Carrasco, NASFAA Staff Reporter
On the Biden administration’s “SAVE Day of Action,” a group of Democratic senators introduced legislation that would codify the Saving on a Valuable Education (SAVE) repayment plan into law.
Over a dozen senators – led by Sen. Jeff Merkley (D-Ore.) – on Wednesday introduced the Codifying SAVE Plan Act, which would codify into law the Biden administration's new income-driven repayment program. The final rule of the SAVE plan was released in July last year, and was a rebranding of the REPAYE plan. While the final rule won’t be fully implemented until July 1, 2024, the Biden administration has begun early implementation of some provisions.
“Higher education should open the doors of opportunity for students—not saddle them with a lifetime of crushing debt,” Merkley said in a statement. “I’ve long pushed for better income-based repayment programs because we must do all we can to address America’s student debt crisis. My Codifying SAVE Plan Act codifies the president’s landmark SAVE Plan into law, ensuring student borrowers will have a much-needed path to loan forgiveness for years to come.”
Rep. Dan Goldman (D-N.Y.) introduced the companion version of this bill last year in December. Goldman said in a statement that the SAVE repayment plan must be codified because of the upcoming 2024 presidential election since a different administration may ultimately decide to end the repayment plan.
“President Biden’s SAVE Plan has impacted the lives of hundreds of thousands of student loan borrowers in New York and millions more across the United States,” Goldman said in a statement. “As we approach the November 2024 elections, we must codify the SAVE Plan into law and protect it from the prospect of being rolled back under future administrations. … Together, we can ensure the survival of this historic student loan debt relief and deliver on the promise of the benefits and possibilities provided by higher education.”
This comes as the Biden administration celebrated its “SAVE Day of Action,” an effort to encourage borrowers to enroll in the program. According to new information from the White House on Wednesday, over 7.7 million federal student loan borrowers are enrolled in the SAVE repayment plan. Out of those, 4.5 million borrowers have a monthly payment of $0 and over 1 million additional borrowers have a monthly payment less than $100.
Publication Date: 3/28/2024
Peter G | 3/28/2024 6:49:15 PM
One could argue that they plan to campaign on it, perhaps, but the public's attention to policy detail is notoriously slim. I don't know that "we're going to vote on ensconcing the SAVE plan!" brings voters out of the woodwork.
Peter G | 3/28/2024 6:47:18 PM
There may be a strategy here, but at least tactically it seems un-wise.
It stands next to no chance of getting through the House (and probably not even up for a vote unless the House takes it up specifically to vote it down), and it could be even more fodder for a court to jump in and say the whole thing falls outside the scope of current statute if Congress feels the need to weigh in to make it so.
Jeff T | 3/28/2024 4:2:36 PM
Income-driven repayment, in general, is exactly that, repayment tied to something other than the amount of your debt. The problem was that previous IDR programs led to negative amortization. The SAVE plan eliminates that and offers forgiveness for anyone if enough payments are made, and that essentially expands the PSLF program to private sector employees. It doesn't solve the issue of schools relying on students for revenue. The solution for that is obvious, should go without saying.
Laura L | 3/28/2024 9:53:22 AM
I'm so glad THIS is their priority.
Jeff A | 3/28/2024 8:54:23 AM
Zero chance the House will cooperate. Just theatre for an election year, which is the majority of what Congress does. Creates false hope for students. But we all know this plan encourages and rewards massive overborrowing which will skyrocket as a result. Pretty much what aid administrators try to deter instinctively.
Did we ever think student loan repayment could work in a way that the amount you borrow may not impact what you have to repay? Wow.
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