- Sens. Jeff Merkley and Tim Kaine introduced a bill to revive the SAVE student-loan repayment plan.
- The plan was introduced by Biden to give borrowers cheaper monthly payments and quicker debt relief.
- The SAVE plan has been blocked since July, and GOP lawmakers are seeking to eliminate it in their budget bill.
A key student-loan repayment plan is on its last legs. A group of Democratic lawmakers are throwing a Hail Mary to revive it.
On Tuesday, Democratic Sens. Jeff Merkley and Tim Kaine led over a dozen of their colleagues in introducing legislation — first viewed by Business Insider — to strengthen and expand the SAVE student-loan repayment plan. Introduced by former President Joe Biden without Congress in 2023, the SAVE plan was intended to give 8 million enrolled borrowers cheaper monthly payments with a shorter timeline for debt relief, but it's been blocked in court since July following GOP-led lawsuits.
While the final fate of the SAVE plan rests in court, Republican lawmakers are seeking to eliminate the plan in their coming budget bill, arguing that the plan is an overreach of the education secretary's authority. That's why Merkley and Kaine are putting forth the Savings Opportunity and Affordable Repayment Plan, or SOAR Plan, which would codify SAVE and expand some of its provisions.
"As the first in my family to go to college, I know the barriers that too many students face in accessing higher education. Income-driven repayment programs are an essential tool to address America's student debt crisis," Merkley told BI. "As Republicans threaten to raze the SAVE Plan and other affordable repayment options for students, we need to fight back by ensuring students have a much-needed path to loan forgiveness, now and in the future."
The SOAR Plan proposed a number of changes to the existing SAVE Plan. It would ensure $0 monthly payments for those earning under 250% of the poverty line — up from 225% — and ensure that all student-loan borrowers, including those with parent PLUS loans and Federal Family Education Loans, can enroll in the program.
The bill also clarifies language surrounding loan forgiveness through the plan, saying that undergraduate borrowers who attended programs for less than two years would fulfill repayment in 10 years on the SOAR Plan. The SAVE plan currently allows for loan forgiveness for borrowers with original balances of $12,000 or less who have made as few as 10 years of payments.
With a Republican majority in the House and Senate, the Democrats' legislation is unlikely to progress.
Republican lawmakers are expected to soon unveil their budget proposal. A memo compiled by the House Budget Committee, viewed by BI in January, proposed repealing the SAVE plan and limiting eligibility for other debt relief programs, like Public Service Loan Forgiveness.
The Department of Education has also indicated it would not revive the SAVE plan should it prevail in court; the department's acting under secretary, James Bergeron, told BI in February following a court ruling that kept SAVE blocked that "the Biden administration misled students into believing their debt would simply disappear, despite the law being clear that a taxpayer-funded bailout is blatant executive overreach."
Some student-loan borrowers previously told BI that the SAVE challenges are keeping them in financial limbo. Natasha Stephens, who voted for Trump, said that she's not asking for loan forgiveness; she's just disappointed the administration is not prioritizing more support for borrowers.
"I think that it helped a lot of people," she said, referring to the SAVE plan, "and it's really heartbreaking that it just ended with nothing."
