Over 5,000 Wyoming Residents in New Student Loan Repayment Plan
Monday, September 11, 2023
More than 4 million student loan borrowers, including 5,100 in Wyoming, are now enrolled in the Biden-Harris Administration's new Saving on A Valuable Education, or SAVE, repayment plan.
Robert Farrington, founder of The College Investor website, explained the new plan inserts a borrower's annual income into a formula using a benchmark of 225% of their state's poverty guidelines to determine an affordable payment level.
"Your monthly student loan payment is going to be calculated based on your W2 discretionary income," Farrington outlined. "What this means for borrowers is those with low income, and those with larger families, will see lower payments. And some people could see payments as low as zero dollars per month."
President Joe Biden campaigned on reducing student debt, but in June the U.S. Supreme Court struck down a policy to forgive between $10,000 and $50,000 for borrowers earning less than $125,000 per year, roughly 97% of people carrying debt.
Republicans in Congress have invoked the Congressional Review Act to block the SAVE program, claiming it puts a financial burden on people who chose not to attend college or paid back their loans. Borrowers can apply for the program at StudentAid.gov/SAVE.
People earning $15 an hour or less would not pay anything under the SAVE plan, and all others are expected to save at least $1,000 a year. Farrington noted no previous income-driven repayment plan has offered payments as low as 5% of a borrower's discretionary income.
"The current plans, such as Income Based Repayment, and Pay As You Earn, are either 10% or 15% of your discretionary income," Farrington stressed. "That's what makes this new SAVE plan such a great deal. It could literally cut your payment in half."
Wyoming offers up to $30,000 in loan forgiveness for qualifying veterinarians, but a similar program for health care workers was not funded in 2023. Farrington noted the SAVE plan was just released in July, and many more people in Wyoming are eligible but have not yet signed up.
"Student loan repayments are just starting right now and there's a lot of information coming at borrowers," Farrington cautioned. "Digesting it all, figuring out the best course of action, is very hard. That's really the key issue, let's get the message out so that we can help borrowers save money every month."
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