With payments expected to restart on October 1st, 2023, millions of borrowers are seeking alternatives to their student debt since the federal pause of student debt loan repayments ended as of September 1st, 2023.
In addition, the Supreme Court of the United States struck down the proposed student debt loan forgiveness plan by the Joe Biden Administration in June, 2023, leaving many worried about their future financial stability.
The Federal Student Aid office, however, has developed a new income driven repayment (IDR) plan known as the Saving on a Valuable Education (SAVE) Plan.
Specifically, the SAVE Plan intends to do two things for student loan borrowers. The first is to “significantly” decrease monthly payments by increasing income exemptions from those on or within the poverty line, which according to the Office of the Assistant Secretary for Planning and Evaluating (ASPE), are single households whose net income is under $32,800 annually.
This new estimation is based on those who make less than or up to $15 an hour, reducing their monthly payments to $0. However, those above this average wage or salary estimation who still apply for the plan are not left out, thanks to the second initiative of the save plan.
The second is to eliminate or reduce interests accrued in other subsidized and unsubsidized loans once scheduled payments are made. For instance, undergraduate loans payments will be reduced from 10% to 5% of income.
The SAVE Plan also differs from traditional IDR plans in that any student borrower can apply to cover their Direct Loans, regardless of when they were taken out.
Traditionally IDR, or Pay As You Earn (PAYE), plans only accommodate those who submit to a 10-year plan for lower, but consistent, loan repayment plans.
While student debt (upon graduation) in Wyoming only averages $31,000, according to the Education Data Initiative, this is an opportunity to combat the fact that 11.4% of the population lives below the poverty line.
While the entirety of this population is not said to be pursuing higher education, Wyoming is also known for spending massive amounts of money on K-12 Education averaging $16,000 per pupil according to Ballotepedia.
More to note, is the fact that University of Wyoming undergraduate students achieve their degrees with an average of $18,000 in student debt, and while this is one of, if not the lowest average in the United States, the SAVE Plan could be an opportunity to reduce repayment plans for Cowboys even further.
For more information on the SAVE Plan, go to: https://studentaid.gov/announcements-events/save-plan.
