Nearly 31,000 Nebraskans Signed Up for New Loan Repayment Plan

The new Saving on a Valuable Education (SAVE) program is a hit in Nebraska, with 30,700 residents signing up by mid-October, a big increase from 22,400 in early September.

Key takeaways

• Nearly 30,700 Nebraskans have joined the SAVE program, which tailors payments to income and family size
• The program offers big savings, with enrollees potentially saving an estimated $1,200 annually
• With broad national participation, the SAVE Plan represents financial relief for millions in the U.S.

What is the SAVE plan?

What is the SAVE plan? It’s a type of income-driven repayment plan recently released by the Federal government.

It considers income and family size, capping payments at 5% to 10% of total income, stopping interest accrual, and offering forgiveness after 20 years of payments. Participants save an average of $102 monthly, providing big relief.

This reflects a national trend of 5.5 million borrowers embracing income-driven repayment plans, with 2.9 million borrowers having $0 payments. Let's dive into how the SAVE program works and the enrollment insights shaping this financial relief for Nebraskans and their student loans.

Nebraskans embrace income-driven student loan repayment

Nebraska's student borrowers are flocking to the Saving on a Valuable Education (SAVE) program, which launched this summer. By mid-October, 30,700 Nebraskans had enrolled, according to the U.S. Department of Education. This shows a big jump from 22,400 in early September and reflects a national trend where nearly 5.5 million borrowers have adopted the income-driven repayment plan.

Understanding the SAVE program

The SAVE Plan takes a borrower's income and family size into account to determine their monthly payment rate. It caps payments at 5% to 10% of the borrower's total income. Moreover, for those earning less than $15 an hour, monthly payments can drop to $0, depending on family size.

It’s a move that’s been welcomed by many as it also stops loan balances from increasing due to unpaid interest, as long as payments are made. On top of that, it comes with scaling forgiveness for regular repayment.

Borrowers under SAVE are estimated to save $102 monthly over previous plans. This amounts to an annual saving of over $1,200 in loan repayments — a significant relief to anyone's budget.

Enrollment insights

Analyzing the enrollment spread, a hefty 11,000 Nebraskans from the state's second congressional district have opted into SAVE. The first district, including Lincoln, isn't far behind with 9,900 sign-ups, and about 7,100 come from the large third district. A remainder of 2,700 come from unspecified areas within Nebraska.

Financial relief for borrowers

Secretary of Education Miguel Cardona supports the program, stating that it helps people "climb the economic ladder without unaffordable student loan debt weighing them down." The sentiment echoes the experiences of many Americans looking for financial freedom from student debt.

James Kvaal, undersecretary for higher education, echoed these benefits: "The SAVE Plan will significantly cut monthly bills for most borrowers, reduce loan default, and ensure that student loans don't need to come before life necessities." This highlights its effect on borrowers' finances and quality of life.

How TuitionHero can help with college finance

At TuitionHero, we're all about making college affordable and manageable. Whether you’re looking into private student loans or trying to refinance your student loans for better rates, understanding your options is key. That's where our complete guides and services might be the help you're looking for with your college finances.

More people are choosing the SAVE Plan for student loan repayments, showing a move toward smarter ways to pay off loans. This supports our commitment to help with things like FAFSA and scholarships. If your student debt feels heavy, or you're figuring out college finances, we've got tools and advice to help you understand and manage your finances better.

Frequently asked questions (FAQ)

Can I enroll in the SAVE program if I am already enrolled in another student loan repayment plan?

Yes, you can switch to the SAVE program even if you're currently enrolled in another repayment plan. However, it's essential to understand what the switch means and how it may affect your overall repayment strategy. The SAVE plan often works better for people with high amounts of debt relative to their income.

Are there specific professions or industries that seem to benefit more from the SAVE program?

While the SAVE program is designed to benefit a wide range of borrowers, some jobs or industries may experience bigger savings. We recommend exploring how the program aligns with your specific financial circumstances and career trajectory.

How does the SAVE program account for changes in income for people with irregular earnings, like freelancers or people with seasonal employment?

The SAVE program is structured to consider income variations. For people with irregular earnings, it may be helpful to understand how the program adapts to fluctuations and whether there are provisions for income reassessment during the repayment period.

Final thoughts

The growing popularity of the SAVE program shows progress in making student loan payments more manageable. TuitionHero is here to support you by offering essential knowledge on how to ease the financial burden of higher education. We'll stay updated on the progress and effects of income-driven repayment plans like SAVE.

Source

• Nearly 31,000 Nebraskans have signed up for new student loan repayment plan
• Biden-Harris Administration Announces Nearly 5.5 Million Borrowers Are Enrolled in the SAVE Plan | U.S. Department of Education