Biden's SAVE Plan Could Provide Relief for Student Borrowers and Benefit Crypto

President Joe Biden recently announced a new student loan repayment plan called SAVE (Saving on A Valuable Education) that aims to provide relief for federal student loan borrowers. The plan could lower monthly payments and help some borrowers get their loans forgiven sooner. This move has implications not just for individual borrowers but also for the broader economy and alternative assets like cryptocurrencies.

How the SAVE Plan Works

The SAVE plan bases monthly payments on a borrower's discretionary income, which is their adjusted gross income minus 225% of the federal poverty line. Payments are capped at 5% of discretionary income for undergraduate loans. The plan also eliminates interest accumulation beyond the required payment, so balances won't snowball.

Additionally, loans under $12,000 will qualify for forgiveness after 10 years of payments. The Education Department estimates that nearly half of borrowers would see their balances cut in half. The plan provides the most benefit for low and middle-income borrowers.

Student Debt Burden in the US

Student loan debt has ballooned to over $1.6 trillion in the United States, held by approximately 43 million borrowers. It's the largest source of non-housing debt in the country. Research shows that this debt burden is forcing borrowers to delay major life milestones like getting married, having children, or buying homes.

The COVID-19 pandemic pause on federal student loan payments offered temporary relief, but payments are set to resume in January 2023. Economists have warned that this could hamper consumer spending and economic growth.

crypto">How Save Could Benefit Crypto

By alleviating student debt burdens, the SAVE plan puts more money back into borrowers' pockets. This could benefit cryptocurrency markets in a couple key ways.

First, individuals may have more discretionary income to invest in alternative assets like crypto. Surveys show that younger demographics are more interested in crypto investing. With lower loan payments, this tech-savvy generation could contribute more capital into digital assets.

Second, the plan could help bolster consumer savings more broadly. Savings rates have declined significantly over 2022 as households draw down on pandemic stimulus funds. More savings provides a buffer for investors to take risks in speculative assets.

The Importance of Rebuilding Savings

One of the Biden administration's goals with the SAVE plan is to help Americans rebuild their savings. The state of savings in the U.S. is troubling - household savings have fallen by an average of $100 billion per month in 2022.

After accumulating excess savings during pandemic lockdowns, households have spent down over $1.9 trillion since 2021. There is now only about $190 billion in savings left. With savings drying up, debt levels have skyrocketed.

More savings gives households financial flexibility. It allows them to smooth consumption amid income shocks and helps mitigate against recessions. Savings is also key for investing in assets like cryptos that can see high volatility.

Potential for More Crypto Adoption

While promising, it remains to be seen how much the SAVE plan could actually benefit crypto. Market conditions play a huge role - if prices are low or dropping, investors may still shy away from riskier assets.

However, in the long run, reducing student debt burdens can give younger investors more capacity to dabble in cryptocurrencies. Crypto adoption is highest among millennials and Gen Z. The technology-native generations tend to be more open to new digital currencies and decentralized finance.

Widespread adoption is critical for the crypto market to continue maturing. The Biden plan, while not a direct boost, could help indirectly by putting more money in the pockets of the demographics already most inclined to buy crypto assets.

How Much Could Crypto Grow in 2023?

After a brutal crypto winter in 2022, investors are wondering if the market could rebound in 2023. There are reasons to be cautiously optimistic, but the road to recovery depends on key factors like regulation, institutional adoption, and macroeconomic conditions.

Crypto Growth in 2022

2022 was one of the worst years on record for crypto, with major drawdowns erasing over $2 trillion in market value. The price of Bitcoin dropped nearly 60% over the year. Collapses of stablecoins like TerraUSD and lending platforms like Celsius shook investor confidence.

However, not all metrics declined in 2022. On-chain activity, trading volumes, and VC funding held up reasonably well, indicating residual interest in crypto among users and investors.

Potential Catalysts for Growth

Looking ahead, there are several potential catalysts that could fuel a crypto rebound in 2023:

  • Improving macro conditions like declining inflation that allow central banks to ease policy
  • Increased institutional adoption from major banks and financial firms
  • The launch of Ethereum's proof-of-stake upgrade to spur DeFi development
  • Greater regulatory clarity around crypto rules and licensing
  • Expanding use cases for crypto payments and NFTs in metaverses

If the stars align, these developments could reignite bull market dynamics. However, ongoing macro uncertainty could still stifle significant growth.

Conservative Price Projections

Most experts predict moderate price appreciation in 2023, rather than a repeat of 2021's meteoric rise. One Bloomberg analyst sees Bitcoin rising 30% to about $25,000 by year-end. A 2023 price target of $30,000 would represent a 100% increase from current levels.

Barring an unforeseen catalyst, these conservative targets seem more realistic than predictions of Bitcoin exceeding $100,000 next year. Steady, sustainable growth for crypto will depend on rebuilding market trust and deepening real-world usage.


The Biden administration's SAVE plan aims to tackle the nation's student debt crisis and could have positive ripple effects on savings rates and alternative investments like crypto. While not a cure-all, modest relief on student loans puts more discretionary income in the hands of younger crypto-friendly investors. If enacted effectively, the plan could aid in developing a healthier, more resilient economy and crypto ecosystem.

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