Background Press Call by Senior Administration Officials on the Biden-Harris Administration’s New SAVE Plan

Via Teleconference

4:03 P.M. EDT

MR. FERNÁNDEZ HERNÁNDEZ: Good afternoon, everyone. Thank you for joining our press call. As a reminder, the contents of this call will be embargoed until 8:30 a.m. Eastern tomorrow.

First, you will hear on the record from White House Domestic Policy Advisor Neera Tanden, then Secretary of Education Miguel Cardona. After, we will have a question-answer period, which will be on background and attributable to “senior administration officials.”

With that, Neera, I will turn it over to you.

MS. TANDEN: Good afternoon. President Biden believes that college should be a ticket to the middle class, not a burden that weighs down on families for decades. That’s why from day one, he and Vice President Harris have been working to deliver relief to student loan borrowers, fix the broken student loan system, and make college more affordable. And our administration is proud to have already canceled $116 billion in student loan debt for 3.4 million Americans.

When President Biden came into office, hundreds of thousands of borrowers weren’t accurately getting credit for student loan payments that should have delivered them forgiveness under income-driven repayment plans. Others have had their loans placed into forbearance by loan servicers, oftentimes in violation of Department of Education rules.

The Biden-Harris administration fixed these historical inaccuracies in the income-driven repayment system. And now, as a result, more than 800,000 borrowers who have been in repayment for over 20 years will start to see their student debt canceled.

Our administration has also dramatically expanded the impact of our Public Service Loan Forgiveness Program, which provides a pathway to debt relief for borrowers who dedicate their careers to public service at the federal, state, and local levels.

At the end of the previous administration, only 7,000 borrowers had been approved for the Public Service Loan Forgiveness Program. President Biden was determined to grow that number and ensure that borrowers who go into public service get the debt relief they’re entitled to under the law.

So, the administration got to work updating systems, increasing outreach, engaging with borrowers and other stakeholders, and making the application easier. And I really want to thank the Department of Education for their leadership here. And to date, we’ve approved more than $45 billion in public service loan forgiveness for over 660,000 borrowers.

But it doesn’t stop there. Our administration has also taken action to provide targeted loan forgiveness, including by approving $10.5 billion for 491,000 borrowers with a total — who have a — who have a total and permanent disability.

We relieved another $1.2 billion for 1.3 million borrowers — $1.2 billion for 1.3 million borrowers who were cheated by their schools, saw their schools suddenly close, or were covered by related court settlements.

And we’ve taken historic action to make college more affordable, increasing the maximum Pell Grant by $900, which is the largest increase to Pell grants in a decade and will help students from families who earn less than roughly $60,000 a year to attend college.

This is a real track record of success, but we’re not finished yet.

Today, I am so proud to join Secretary Cardona in announcing another important step in the President’s plan to provide relief to borrowers: the launch of the Savings on a Valuable Education Plan, also known as the SAVE Plan.

The SAVE Plan is an income-driven repayment plan that calculates payments based on a borrower’s income and family size — not their loan balances — and forgives remaining balances after a certain number of years.

Through the SAVE Plan, which is the most affordable income-based repayment plan in history, millions of borrowers will have their monthly payments cut to zero dollars. Others will save nearly $1,000 per year — $1,000 per year.

This plan is a gamechanger for millions of Americans, many of whom are putting off having children, buying their first home, or even starting a business because they can’t get out from under their student loans. Student loans will be manageable.

President Biden believes this is flat out wrong that so many families are struggling with these costs. That’s why, at his direction, this administration is using every tool at our disposal to get student loan borrowers the help and the relief they need to reach their dreams. And his SAVE Plan is a next step in this effort.

With that, I will turn it over to my good friend, Secretary Cardona.

Secretary Cardona, thank you and the entire department for the incredible — your incredible leadership and the incredible work that has gone on to make this — these efforts realized. We are so fortunate to have you as a champion for all of our students.

Thank you.

SECRETARY CARDONA: Thank you very much, Neera, for your words but, more importantly, your leadership championing President Biden’s commitment to college affordability and the partnership you and your team have demonstrated every step of the way.

And I want to thank the dozens from the media who are joining this call today for your time and for your commitment to sharing the work that we’re doing.

We’re really proud of this work. Today, the Biden-Harris administration takes another historic step towards reducing the burden of student debt in this country.

As you heard earlier: From day one, we’ve been focused on fixing the broken loan system. Like Neera said, we’ve forgiven more debt than any other administration in history.

We opened a new pathway to debt relief and created a yearlong on ramp for borrowers as they transition back into repayment.

We refuse to go back to those days before the pandemic, when nearly a million borrowers defaulted on their loans every single year because they couldn’t afford the payments.

That’s why I’m really thrilled to announce that, starting today, borrowers can enroll in the most affordable student loan repayment plan ever available. It’s called SAVE — Saving on a Valuable Education.

The SAVE Plan is a game-changer. Take a nurse earning $77,000 a year, married with two kids. With SAVE, their payment will drop from $267 a month to just $40 a month. That’s over $2,700 a year in savings.

This is real money President Biden is putting back into the pockets of working families.

And when borrowers struggle to make ends meet, we’re not going to kick — kick them while they’re down. SAVE is the first true student loan safety net in this country.

Anyone who makes under $32,000 — or $67,000 for a family of four — will have $0 due in monthly payments. No one should have to choose between affording food or housing and paying a student loan.

It also ends runaway student loan interest that leaves borrowers owing more than their initial loan. The nightmare of making payments and watching your loan balance get bigger and bigger will finally be over.

That’s because if you’re enrolled in SAVE program and your loan accrues $50 in interest and your payment is only $30, the remaining $20 won’t be charged.

And when SAVE is fully implemented next summer, the benefits will be even greater. SAVE will slash undergraduate borrowers’ payments in half. It’ll put community colleges at — community college students and other low-balance borrowers on a faster track to forgiveness. And it’ll allow us to automatically enroll borrowers struggling to repay their loans.

And SAVE won’t just benefit today’s borrowers. It will also benefit millions of future students by making college more affordable. This is a gamechanger. And — and to me, as a lifelong educator, I know the impact it’s going to have on students who are getting ready for kindergarten in a week or two or those students that are getting ready for high school.

I’ll never forget the time when I was assistant superintendent in the district. I had a young student from Dominican Republic who — maybe five or six years in the country — him and his father were in my office. At the time, he was a sixth grader, and I was his principal before. He was one of the smartest kids I had in the whole school.

But in my office, when we were talking, the father mentioned to me that his son wasn’t going to college. Keep in mind, he’s in sixth grade at the time. But his father said, “No, no, he can’t go to college. It’s too expensive. There is no way we can do that.”

The boy was about 12 years old, one of the smartest kids I had in the whole school, and already college was out of reach — or they believed college was out of reach. Imagine the price we’ve paid as a country for not ensuring that all students can realize their full potential.

That’s why SAVE is such a big deal. We’re creating a pathway for students like him.

Think of the potential of this country when we can tap on the shoulders of all students with potential to say, “You can go to college.” When we make student loan repayment more affordable, we make financing a college education more affordable. And when we make financing a college education more affordable, we make degrees and credentials more accessible and the American Dream more attainable.

We know college graduates on average in the course of their life earn over a million dollars more that students who graduate with a high school degree.

I want to thank Under Secretary James Kvaal and Federal Student Aid’s Chief Operating Officer Rich Cordray and their entire teams for their incredible work. The passion is clear day to day, and this is an example of the great work that’s happening because of their passion, their hard work, their dedication, and good leadership by President Biden.

Enrolling is easy. It takes about 10 minutes. And staying enrolled is easier too, because borrowers can have their income information automatically updated every year.

Borrowers previously enrolled in the REPAYE plan will allom- — automatically receive the benefits of SAVE. But if we want more borrowers to benefit from SAVE, they need to know about SAVE.

That’s why I’m thrilled we’ve — we have this new nationwide partnership with Civic Nation, the NAACP, the National Urban League, RISE, Student Debt Crisis Center, UnidosUS, and Young Invincibles. Our new “SAVE on Student Debt” campaign will maximize our own communication and outreach and help enroll as many borrowers as possible.

With the SAVE Plan, we’re making a promise to every student — like that student who was in my office — and every student who borrowed a federal loan to pay for college: Your payments will be affordable. You’re not going to be buried under a mountain of interest. And you won’t be saddled with a lifetime of debt.

Thank you.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you, Mr. Secretary. We will now move on to the question-and-answer portion of the call. As a reminder, this will be on background and attributable to “senior administration officials.”

The contents of the call, including the background — or including the question-and-answer is embargoed until 8:30 a.m. tomorrow. With that, please use the hey — the raised hand function to queue up, and I will give you a minute to do that.

We will start. Please identify your outlets as you ask your questions. We will start with Molly. You should be unmuted now.

Q Hi, thanks so much. This is Molly Nagle with ABC News. I just had a quick clarification question and a follow-up on the time of repayment. On the clarification, is this open to all borrowers, even those who have graduated college, or is this purely for new borrowers going forward?

And then on the repayment program: Obviously, some of the other income-driven repayment programs had that 20- to 25-year maximum number of payments, as long as the payments continue to be made. I see in the fact sheet here, you say, for those with $12,000, it would be 10 years. But if someone has, say, $100,000 in debt or, you know, $20,000 in debt, is there a maximum cap on the number of years people would have to make the payments? Or would it continue to go up by that year for every $1,000 over $12,000? Thank you.

SENIOR ADMINISTRATION OFFICIAL: Hey, Molly, I can help with those questions. The plan is available to all students with loans that are held by the Department of Education. And the maximum amount of time that anyone would need to repay is 20 years.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We will go to —

SENIOR ADMINISTRATION OFFICIAL: I beg your pardon. For undergrads, it’s 20 years. For graduate students, it’s 25 years.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We will go to Katie next. You should be unmuted now.

Q Hi, thanks so much. This is Katie Lobosco at CNN. Is there a date or some kind of deadline — if a borrower wants to apply for SAVE and for it to take effect in their account before payments restart in October, when do they need to apply by? Thanks.

SENIOR ADMINISTRATION OFFICIAL: We’re encouraging borrowers to apply as soon as possible. And if borrowers enroll in SAVE in the coming days, that — that will be reflected in their first billing statement.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We’ll go to Orion next. You should be unmuted now.

Q Hi. Thank you. Orion Donovan Smith with the Spokesman-Review. As Secretary Cardona just said, college graduates earn a whole lot more over the course of their working lives than those who don’t have a college degree. I just want to get your response to the criticism that this is disproportionately going to benefit higher earners over the course of their lives and, particularly, that this is sort of a — an indiscriminate grant program for those who have a lot of debt.

SENIOR ADMINISTRATION OFFICIAL: Well, this — under this program, the amount you pay each month would be based directly on your income. And as a result, the benefits of this program would be delivered disproportionately to low-income borrowers and struggling borrowers.

You know, more broadly, you know, we have student debt as a major issue for not just 40 million borrowers, but also their families and communities. And it has an impact on homeownership, small business formation, retirement savings, family formation. And as a result, helping students with student debt helps not only those borrowers, but it also helps create stronger families, stronger communities, and a stronger economy.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We will go to Haley next. You should be unmuted now.

Q Hi. Thanks. Haley with Scripps News. I wanted to ask about the public outreach campaign. How many resources are dedicated to this? And how quickly do you anticipate being able to directly talk with, according to the factsheet, nearly 30 million borrowers? And is this going to be a long-term effort, given that some of these changes aren’t going into effect until next summer still? Thanks.

SENIOR ADMINISTRATION OFFICIAL: Thank you for the question. So we’re expecting the organizations that are our founding partners — so Civic Nation, NAACP, National Urban League, RISE, Student Debt Crisis Center, UnidosUS, and Young Invincibles — to begin working to engage organizations to help support both over the short term, the next few months focused on getting borrowers enrolled in the SAVE Plan, so that can be reflected in their first payments as payments resume.

But this is going to be a long-term campaign too to help borrowers, once they’re enrolled in the SAVE Plan, find other options through programs like Public Service Loan Forgiveness, if they’re eligible for other discharges or forgiveness options, help them navigate the student loan program so that they can feel confident and supported in making payments into the future.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We’ll go to Tara next. You should be unmuted now.

Q Hi, there. This is Tara Siegel Bernard from the New York Times. I had a few questions. I hope you don’t mind.

The first: Will you need to re-enroll each year or recertify? Or has that problem been solved?

And was also wondering if — let’s say somebody paid more than their required monthly payment each month — if that extra amount will go first towards any interest that would be subsidized before it goes to their principal? Kind of technical, I know.

SENIOR ADMINISTRATION OFFICIAL: Hey, Tara. Thanks for the question. So, if you’d make an extra payment — you know, as you note, the option of making prepayments is available to borrowers at any time, and those payments would — assuming you satisfied your monthly due payment, would go to principal, not to interest.

And this new IDR application allows borrowers to apply once and authorizes the department to keep up to date on their income information and therefore their loan payments. So the vast majority will no longer need to reenroll each year.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We will now go to Bo. You should be unmuted now.

Q Thank you. Bo Erickson here with CBS. Does this apply to Parent PLUS loans as well? And if so, whose income is the Parent PLUS loan based on? Is it the student’s or is it the parent who took out the Parent PLUS loan?

SENIOR ADMINISTRATION OFFICIAL: Hey, sorry, this is [senior administration official] with the Department of Education. In general, the path for eligibility for Parent PLUS loans is pretty restrictive. They’re, generally speaking, not — not really eligible. There is a very, very small exception for some past borrowers.

For those few who would get in, it would be based upon their income, not the student’s income. But, again, they’re, generally speaking, not eligible for this plan.

SENIOR ADMINISTRATION OFFICIAL: I would just add: We have another income-driven repayment plan that is available as — under different circumstances.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you. We have time for a few more questions. We will go to Michael. You should be unmuted now.

Q Hey, it’s Michael Stratford from Politico. Thanks for doing the call. I have a question about the timeline here. We’re hearing some anecdotal reports from borrowers who have already applied for SAVE through the beta website that servicers are telling them that they’re going to need weeks or months to process the applications.

So I’m wondering if you can tell us how many IDR applications are currently backlogged and how long you expect borrowers to have to wait, in general, for processing of their application to begin. And are you planning to refund borrowers who miss out on an interest subsidy or a lower payment while their application is stuck, you know, in processing at one of the servicers?

SENIOR ADMINISTRATION OFFICIAL: Thanks, Michael. So, in general, we expect servicers to process an application in about four weeks from when it’s received. The beta period was time well spent for us to help work out bugs within the system to create the most user-friendly experience that will allow both borrowers to apply quickly, but also servicers over time to process those applications more automated — in more automated fashions. So we are expecting quite a few applications early on, and we will work with servicers to process those applications as fast as possible.

Applications that go through our website — — generally, most borrowers will be able to — servicers will be able to process those applications quickly.

And, you know, for borrowers who need a little bit of extra time — we’re not expecting there’s many of these — but complicated cases or borrowers who apply right before a monthly payment is due or a statement is generated, servicers will work with those borrowers to help make sure that they’re, you know, paying the amount that they should under an income-based repayment plan, including giving them a short-term forbearance to process their application if needed.

But for borrowers who apply in the next coming days, we expect servicers to process those applications for a borrower’s first monthly payments to be due.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you. And our final question will go to Gabriel. You should be unmuted now.

Q Hi, this is Gabe Rubin from the Wall Street Journal. I just had a question about — sort of piggybacking on Michael’s question about servicers: Are the servicers training their customer service reps to walk borrowers through these options — since that’s the primary point of contact for most of these borrowers with the student loan system — especially if people have, sort of, questions about which plan is best for them or if SAVE will immediately help them?

And, you know, there’s been some confusion in recent weeks — people who have tried to sign up for SAVE early on or at least be able to estimate what their payment will be when the payment pause ends. So, I guess, have the issues with the payment estimator or “what plan should I sign up for” that — that estimator — has that — have those been worked out? And as — are those issues that you’re sort of dealing with as we sort of gear up for September 1st?

SENIOR ADMINISTRATION OFFICIAL: So, as we’re launching the official application tomorrow, we’re expecting all borrowers to have a smooth experience, one that allows them to get their income most directly from the IRS and, by the end of the application be able to see, across a variety of income-based repayment plans, what their monthly payment will be. So they’re fully equipped with knowledge about what is the most affordable one, and for most case — for most borrowers, it will be the SAVE Plan.

I don’t know the specific details of what you raised, but I’m happy to follow up after if there was a particular situation you were seeing.

But, again, tomorrow as we launch the official application, we are expecting that experience to be smooth. By the end of the application, most borrowers — all borrowers will be able to see the monthly payments that they will, you know, be entitled for before submitting the application.

MR. FERNÁNDEZ HERNÁNDEZ: Thank you so much. That concludes our press call for today.

As a reminder, both the call, the materials you received over email are embargoed until 8:30 a.m. tomorrow.

Thank you so much for joining us.

4:29 P.M. EDT

Official news published at

Global Media Coverage