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Originally Published: Jan 12, 2024
Originally Published: Jan 12, 2024 Last Updated: Jan 12, 2024 7 min read
A check written out to Student Loans for $0
Olive Burd / Money; Getty Images

It’s not student loan forgiveness, but it may be the next best thing for many borrowers.

Under President Joe Biden’s new income-driven repayment plan, 3.9 million federal student loan borrowers have been approved for $0-a-month loan payments, according to new figures released from the Education Department.

In total, 6.9 million borrowers have enrolled in the Saving on a Valuable Education (SAVE) plan, a federal repayment plan that ties borrowers' monthly bills to 10% of their disposable income. However, if borrowers have no disposable income, as defined by a formula based on the federal poverty level, they're payments are set to $0.

These new figures mean more than half of those who have signed up so far have income levels low enough to qualify for $0 loan bills. On average, all borrowers in the plan have had their monthly bills reduced by $117, amounting to a savings of over $1,400 a year from pre-SAVE levels.

“SAVE is doing what it said it was going to do, which is to provide significant relief,” says Betsy Mayotte, the president of The Institute of Student Loan Advisors, a nonprofit organization that provides free student loan advice to borrowers. “Especially to borrowers whose loan balances are high compared to their income.”