Yaёl Bizouati-Kennedy

Mon, July 3, 2023 at 11:55 AM EDT

Just a few hours following the Supreme Court — in a 6-3 June 30 decision — striking down President Biden’s student loan forgiveness program, the administration announced it intended to take new steps to help borrowers.

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“While today’s decision is disappointing, we should not lose sight of the progress we’ve made — making historic increases to Pell Grants; forgiving loans for teachers, firefighters, and others in public service; and creating a new debt repayment plan, so no one with an undergraduate loan has to pay more than 5% of their discretionary income,” Biden remarked in a June 30 statement.

The administration announced it was seeking an “alternative path to debt relief” and also announced it had finalized the “most affordable repayment plan ever created, ensuring that borrowers will be able to take advantage of this plan this summer — before loan payments are due.”

The repayment plan — called the Saving on a Valuable Education (SAVE) Plan — will cut monthly payments to $0 for millions of borrowers making $32,800 or less ($67,500 for a family of four) and save all other borrowers at least $1,000 per year, according to the Education Department. The SAVE plan will replace the existing Revised Pay-As-You-Earn (REPAYE) plan. Additional benefits will go into effect in July 2024.

“We started the process to provide relief to as many people as we can, as fast as we can, through rulemaking. Under the law, this path will take time, but we are determined to keep fighting for borrowers and we will keep you updated in the months ahead,” Secretary of Education Miguel Cardona declared in a statement.

The administration also said that it was instituting a 12-month “on-ramp” to repayment, running from Oct. 1, 2023, to Sept. 30, 2024, “so that financially vulnerable borrowers who miss monthly payments during this period are not considered delinquent, reported to credit bureaus, placed in default, or referred to debt collection agencies.”