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Nearly 5.5 million borrowers have signed up for the Biden administration’s new income-driven repayment program, and about half of those individuals are paying $0 a month, according to new data released Wednesday.
About 1.8 million of those borrowers weren’t previously enrolled in an income-driven repayment plan, and about 364,000 switched from other repayment plans since September, according to a news release. The administration finalized the new income-driven repayment plan, known as Saving on a Valuable Education, or SAVE, at the end of June. The new plan could transform how students pay for college, depending on how many take advantage of it.
In August, about 8.23 million borrowers were signed up for one of the department’s existing income-based repayment plans, federal data showed.
“Under President Biden, the Department created the SAVE Plan so that young people and working families can climb the economic ladder without unaffordable student loan debt weighing them down,” Education Secretary Miguel Cardona said in a statement. “I’m thrilled to see that in less than three months, nearly 5.5 million Americans in every community across the country are taking advantage of the SAVE Plan’s many benefits, from lower monthly payments to protection from runaway student loan interest.”
Borrowers on the SAVE plan are saving $102 a month and $1,224 a year, per the release. Officials said enrollment in SAVE has grown by about 60 percent since it started over the summer.
“The SAVE Plan will significantly cut monthly bills for most borrowers, reduce loan default, and ensure that student loans don’t need to come before life necessities,” Under Secretary James Kvaal said in a statement. “With nearly 5.5 million people enrolled after only two months, it’s clear how much borrowers need a plan like SAVE.”
