People in favor of canceling student debt protest outside the Supreme Court, Friday, June 30, 2023, in Washington. A sharply divided Supreme Court has effectively killed President Joe Biden’s $400 billion plan to cancel or reduce federal student loan debts for millions of Americans. Credit: Mariam Zuhaib / AP

AUGUSTA, Maine — After the Supreme Court blocked President Joe Biden’s plan to allow federal student loan borrowers to erase up to $20,000 in debt, his administration began taking applications Sunday for a new program.

The Saving on a Valuable Education Plan — or SAVE — could face similar legal challenges to the initial Biden bid that the U.S. Supreme Court struck down in June. In the meantime, here’s how Mainers can apply and consider other student debt relief programs offered by the state.

How do you apply?

Applications for the program are open now. Applicants usually need to provide their federal student aid ID along with contact and financial information. SAVE is a type of income-driven repayment plan, which ties a borrower’s monthly payments to their income and family size.

Those earning less than 225 percent of the federal poverty line, or $32,800 a year for a single person, will not owe any monthly payments, according to the U.S. Department of Education. That’s a change from current plans, with a cutoff at 150 percent of the poverty line, or $22,000 annually for a single person.

Under the SAVE plan, one person making $60,000 annually, for example, will owe $227 per month, while a family of four making $60,000 will owe $0.

The SAVE plan is replacing the Revised Pay As You Earn — or REPAYE — plan, which had borrowers pay 10 percent of their discretionary income toward undergraduate student debt. By next year, the Biden administration said borrowers will pay only 5 percent of their discretionary income per month under the new plan, adding that those enrolled in REPAYE will get automatically enrolled in SAVE.

Monday’s launch of the SAVE site comes ahead of student loan repayments resuming this fall after a three-year pause due to the COVID-19 pandemic. Interest will start accruing in September, and monthly loan repayments restart in October.

Is the new plan legal?

Biden has called his alternative plan the “most affordable repayment plan ever.” But Republicans have criticized it, just as they did when the Supreme Court blocked it in June by saying the president overstepped his authority to initiate policy without an act of Congress.

While no lawsuit has yet been filed against the new SAVE plan, conservatives have said it is only a matter of time before it gets challenged in court.

Biden’s previous attempt to cancel up to $20,000 in student debt for millions of Americans drew different reactions last year from Maine’s congressional delegation. Rep. Chellie Pingree, a Democrat representing the 1st District, was the only member of the delegation to back it.

Sen. Susan Collins, a Republican, said it was unfair to those who did not take out loans for school. Rep. Jared Golden, a Democrat who represents the 2nd District, said Biden’s plan was “out of step with the needs and values of working-class Americans.” A spokesperson for Sen. Angus King, an independent who caucuses with Democrats, said he recognized the value of the move but felt the rising cost of college needed to be tackled “more directly and sustainably.”

What other student debt relief options exist in Maine?

Mainers could certainly benefit from any relief programs, as Forbes reported in July the state had an average student debt loan balance of nearly $33,000.

Maine already offers a Student Loan Repayment Tax Credit to residents who earned a degree after 2007 from an accredited college, community college or university, file a Maine individual income tax return and meet earned income requirements. In most cases, the credit is limited to $2,500 annually for each taxpayer and up to $25,000 over a lifetime.

The earned income requirement is making at least the state minimum wage as determined on Jan. 1 of the taxable year, multiplied by 936 hours. For tax years beginning in 2022, that amount is just under $12,000.

Billy Kobin is a politics reporter who joined the Bangor Daily News in 2023. He grew up in Wisconsin and previously worked at The Indianapolis Star and The Courier Journal (Louisville, Ky.) after graduating...