Millions with student loan debt will soon pay less

(CNN)– Millions of borrowers will see their monthly student loan payments reduced starting in July.

It’s thanks to one of the Biden Administration’s biggest changes to the federal student loan system to date.

The Biden Administration’s new repayment plan, known as ‘Saving on a Valuable Education’ or SAVE, will be fully phased in this Summer.

For most borrowers, the plan offers a lower monthly payment than other federal student loan repayment plans.

And it cancels student debt for some borrowers after they make as few as 10 years of payments.

In July, monthly payments on loans borrowed for undergraduate school will be reduced from 10% to 5% of discretionary income.

SAVE also changes the way discretionary income is calculated, shielding a bigger portion of a borrower’s income.

Two republican-led states have sued to overturn the SAVE plan.

They argue the Biden Administration is overstepping its legal authority.