On Wednesday, the U.S. Education Department announced the reopening of two significant student loan repayment programs for newcomers, as the President Joe Biden’s key initiative faces delays due to legal battles.

Following months of ambiguity, the administration stated that millions of borrowers will have “more breathing room.” Approximately 8 million Americans affected by Biden’s paused plan, which has indefinitely halted payments, now have the option to switch to the older programs to ensure their payments contribute towards future debt forgiveness.

This announcement is seen as a political move in the concluding phase of Biden’s presidency, recognizing that his goal of creating an “affordable repayment plan” hasn’t met expectations, particularly after setbacks in the Supreme Court.

Here’s what you need to know about the available repayment programs:

What Is SAVE?

In Summer 2023, the Biden administration initiated a student loan repayment program dubbed Saving on a Valuable Education, or SAVE. Eligible borrowers could apply for SAVE before the pandemic-related payment pause ended the next fall.

Through SAVE, those with undergraduate loans could have seen their monthly payments drop to 5% of their discretionary income, with many borrowers ending up with $0 payments. This program attracted millions of enrollees.

However, the program faced challenges. Attorneys general from conservative states challenged its legality, and this summer, a federal appellate court halted SAVE and raised concerns regarding other government programs based on people’s earnings.

Consequently, the Education Department has placed all SAVE participants in an interest-free forbearance, meaning they aren’t required to make payments, and interest won’t accrue on their loans – at least for now.

However, there is a stipulation. While SAVE remains unresolved, borrowers who do not sign up for a different program during this period cannot progress towards full loan forgiveness. Typically, borrowers in income-driven repayment plans can have their debts forgiven after 20 to 25 years of payments.

The department is also particularly concerned for those eligible for the Public Service Loan Forgiveness (PSLF) program. Workers in public service sectors—such as healthcare professionals, emergency responders, and certain nonprofit employees—often combine PSLF with income-driven plans, allowing them to maintain low payments and remain qualified for forgiveness after completing 10 years of payments.

What Are PAYE and ICR?

Fortunately for borrowers with large loans and modest incomes, SAVE isn’t the only repayment option available based on income and family size.

The Education Department provides a range of similar plans. The two currently accepting new enrollments are the Pay As You Earn Repayment Plan (PAYE) and the Income-Contingent Repayment Plan (ICR).

Established in 2012, under PAYE, individuals do not have to pay anything if their income is below $22,590 for single individuals or below $46,800 for a family of four. For those earning above these thresholds, they need to pay 10% of their monthly income, with full loan relief available after 20 years of repayment.

On the other hand, ICR is less advantageous for most borrowers. This older plan sets payments to $0 for individuals with an income below $15,060 or $31,200 for families of four, with those earning more required to pay 20% of their annual income. Complete cancellation of debt can be achieved after 25 years.

Both PAYE and ICR are now open for new enrollments and will remain available until July 1, 2027, as stated by the Education Department.