US President Joe Biden has introduced the SAVE (Saving on A Valuable Education) student loan plan, aiming to alleviate student debt and encourage saving. The plan offers more affordable options for reducing student debts, including cutting payments in half and potentially reducing balances to zero.
Monthly payments under the new plan are based on income and family size rather than the total loan balance. Additionally, payments for undergraduate loans are now capped at 5% of discretionary income. The plan also includes loan forgiveness after 10 years of payments for loans under $12,000, and no interest will accumulate beyond the income-based payment.
The Biden administration emphasizes the plan’s benefits for low and middle-income borrowers, as it could allow them to put more money into savings accounts. This newfound savings potential, particularly among the younger and crypto-savvy generation, could lead to increased investment in riskier assets like cryptocurrency, benefiting markets in need of fresh capital inflows.
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