Who Benefits from the SAVE Plan's Student Loan Interest Waiver?

The Biden administration began implementing the Saving on a Valuable Education (SAVE) plan--a new income-driven repayment (IDR) plan for federal student loans--in 2023. Compared with prior IDR plans, the SAVE plan reduces payments and includes a new benefit that cancels unpaid monthly interest rather than allow a borrower's balance to increase when required payments do not cover accruing interest. The SAVE plan is on hold because of pending legal challenges, but even if it is ultimately struck down, the interest waiver could be included in future IDR plans because it solves what many see as a flaw of IDR plans. It is therefore important for policymakers to know who benefits from this feature.