- The Education Department released data showing 5.5 million borrowers have enrolled in the new SAVE plan.
- Of those borrowers, 2.9 million of them are making $0 monthly payments.
Millions of student-loan borrowers are not paying anything toward their balances right now thanks to President Joe Biden's new repayment plan — but Republicans and one Democrat are seeking to block it.
On Wednesday, the Education Department announced that 5.5 million student-loan borrowers are now enrolled in the new SAVE income-driven repayment plan intended to lower monthly payments to borrowers. Per the department, 2.9 million of those borrowers now have $0 payments, and all other borrowers are saving an estimated $102 a month compared to other repayment plans, based on data as of October 15.
"The SAVE Plan will significantly cut monthly bills for most borrowers, reduce loan default, and ensure that students' loans don't need to come before life necessities," Under Secretary of Education 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."
The department also said in its press release that 75% of borrowers enrolled in SAVE also received a Pell Grant, which are grants low-income students can receive to fund their higher educations, and $300 billion in federal loans are in currently in repayment through the SAVE plan.
However, on November 7, Democratic Sen. Joe Manchin signed onto the GOP effort to block SAVE's continued implementation. In September, Sens. Bill Cassidy, John Thune, and John Cornyn led some of their GOP colleagues in introducing a bill to overturn SAVE using the Congressional Review Act, which is a fast track tool Congress can use to repeal final rules put in place by federal agencies. With Manchin on board, the GOP effort has bipartisan support that could bring the bill a step closer to reaching Biden's desk.
The House also introduced a companion version of the bill that it will advance to the floor for a full vote, as well. Even if the legislation does pass Congress, Biden will likely veto it, requiring a two-thirds majority in Congress to overrule his veto.
If that legislation fails, Republicans on the House Appropriations Committee also included language in their budget proposal to prohibit funding for the SAVE plan and other targeted relief measures for student-loan borrowers.
The latest SAVE data from the Education Department comes just over a month after federal student-loan payments resumed following an over three-year pause. It's an unprecedented transition back into repayment, and both the department and servicers have acknowledged that funding for Federal Student Aid is strained and it has attempted to facilitate a smooth transition for borrowers.
Recently, the department released an internal memo from Federal Student Aid outlining the errors servicers have made with borrowers' accounts since repayment began, including 78,000 borrowers who received inaccurate bills after converting to SAVE. The department instructed servicers to place all impacted borrowers on administrative forbearance, without any interest accrual, until all account issues are resolved.