Urban Institute Update
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Urban Institute Update
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Public service loan forgiveness and the SAVE plan for federal student loans
The Biden administration’s new income-driven repayment (IDR) plan for federal loans, Saving on a Valuable Education (SAVE), will be in full effect next July.
SAVE is likely to subsidize a large share of the debt used to finance education and social work degrees in the coming years. Urban examined how much borrowers from these two professions, who are typically eligible for the Public Service Loan Forgiveness (PSLF) program, could benefit from the plan.
Borrowers with bachelor’s degrees in education or social work with a typical loan balance of $32,000 would see their total loan payments drop to less than $7,000 under SAVE and PSLF compared with $20,000 to $24,000 under current IDR options.
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