MT sees sluggish signup for SAVE program to reduce student debt

September 8, 2023 - By Mark Moran - Producer-Editor, Contact - News

Big Sky Connection - An estimated 4 million Americans stand to have their student loan payments reduced or even eliminated under the Biden administration's SAVE plan. The plan bases loan repayments on a person's income, but critics say it saddles American taxpayers with debt they did not incur. Comments from Robert Farrington, founder, of The College Investor.

Click on the image above for the audio. - Some 43.5 million Americans have some form of federal or private student loan debt, which is 13% of the population, according to the Federal Reserve's Consumer Credit report. (Adobe Stock)

Mark Moran

September 8, 2023 - The U.S. Department of Education said more than 4 million Americans have enrolled in the Biden administration's college loan repayment program, known as SAVE.

In Montana, more than 130,000 borrowers qualify.

The SAVE program bases a borrower's loan repayments on their discretionary income; money remaining after buying basic necessities. And it increases the amount of income protected from student loan repayment obligations. The plan could eliminate some borrowers' debt completely, and others could save as much as 40% a month.

Robert Farrington, founder of The College Investor website, said nearly every borrower in Montana can benefit, but few have applied.

"In Montana specifically, 13,800 borrowers have already signed up for the SAVE repayment plan out of 132,000 borrowers in the state," Farrington reported. "Almost 10% have already signed up, but there's a lot more who could be eligible in the state of Montana."

After a three-year hiatus, student loan payments resume Oct. 1. Opponents argued canceling debt comes at the expense of American taxpayers.

Farrington pointed out there have been income driven repayment plans in the past, but none with rates as aggressive as the SAVE program's. Most calculate discretionary income using 225% of the federal poverty level. The SAVE program uses 150%.

"What this means for borrowers is those with low incomes, and those with larger families, will see lower payments," Farrington emphasized. "Some people could see payments as low as zero dollars a month."

Critics of the SAVE plan, including Sen. Steve Daines, R-Mont., said it shoulders American taxpayers with student loan debt they did not incur. Others have called it a slap in the face to Americans who worked multiple jobs to pay for college.

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