The White House is ramping up efforts to get more federal student loan borrowers to sign up for a new repayment plan that can often reduce their debts.

The election year effort is part of a push by President Joe Biden to make good on a campaign pledge four years ago to ease the burden of student loan borrowers.

What You Need To Know

  • After the Supreme Court rejected President Joe Biden's multibillion-dollar debt forgiveness program, his administration has embarked on a more piecemeal approach, in part, by reworking existing initiatives to reduce or even eliminate student loan debts

  • Last August, the Biden administration created the SAVE Plan to help eligible borrowers reduce their student loan debts

  • On Wednesday, the White House held a day of action to draw attention to the plan, and encourage more borrowers to enroll in it

  • Education Sec. Miguel Cardona told Spectrum News the administration is trying to provide targeted relief to borrowers who are more likely to go into default

Last August, the Biden administration created the SAVE Plan to help eligible borrowers reduce their student loan debts. On Wednesday, the White House held a day of action to draw attention to the plan, and encourage more borrowers to enroll in it.

“We want to make sure people can stand on their own two feet and when you take out a loan of $10,000, and you’re paying it for 10 years, and you still owe more because of the interest, there’s a problem with the system,” Education Sec. Miguel Cardona told Spectrum News.

“We want to make sure as their salary goes up, they pay more. It’s called income driven repayment. It’s a way to prevent default, and give more people access to higher education,” he continued.,

When Biden ran for president in 2020, he promised to cancel at least $10,000 in student loan debt owed by every borrower. But the Supreme Court rejected his multibillion-dollar debt forgiveness program. So his administration has embarked on a more piecemeal approach, in part, by reworking existing initiatives to reduce or even eliminate student loan debts.

Under the SAVE plan, beginning this summer, monthly payments on undergraduate loans will be capped at 5% of discretionary income, down from 10% now, for eligible borrowers. In some cases, the debt can be wiped out entirely.

Cardona said the administration is also working to create a new debt relief program, but in the meantime, it is trying to provide targeted relief to borrowers who are more likely to go into default, make the conditions of repayment more manageable and expand the forgiveness of loans owed by borrowers who enter public service.

“We recognize that because of the Supreme Court decision, we have to make sure that we’re thinking about the parameters that they’ve set. But we’re going to be as aggressive as possible, because we know across the country, this system is broken, and it needs to be fixed, and we’re not afraid of fixing it,” Cardona said.

When asked what the administration is working to lower the cost of higher education, Cardona mentioned how the president has proposed increasing Pell grants, which are given to students who display a financial need, and working to improve and expand access to federal student aid programs.

The White House says more than 7.7 million borrowers are enrolled in the SAVE Plan and nearly 150,000 borrowers have had their loans canceled. More than 43 million Americans have outstanding federal student loan debt.