By MICHAEL CRIMMINS
Glasgow News 1
After roughly a year in repayment limbo, many Barren County residents will begin to see their student loan balances changing as the repayment pause ends for those on the Saving on a Valuable Education — or SAVE — student loan plan.
Student loans in a SAVE plan began accruing interest again on Aug. 1 after the U.S. Department of Education announced its decision to restart payments on loans that had been in interest-free forbearance through a temporary federal court injunction blocking the program, which was affirmed and expanded in February, according to the Kentucky Center for Economic Policy.
The University of Kentucky Cooperative Extension Service stated that 13.6 percent of Barren County’ population had student loan debt in 2022 with the median amount being $11,782. According to an estimate by the Student Borrower Protection Center, a typical borrower affected by this policy change will incur more than $3,500 in interest charges per year, or roughly $300 per month.
The center also estimates that 7.84 million people in the U.S.A are enrolled in a SAVE plan as of March 31 owing a total of $439.7 billion.
The restarting of interest for SAVE loans is happening at the same time the federal reconciliation legislation permanently eliminates SAVE and shrinks income-driven repayment options for people who have to take out loans to pay for college.
“These policy changes will worsen the student loan crisis in Kentucky, where 20% of borrowers participate in an income-driven repayment plan, covering 32% of total student debt in the state,” the center for economic policy stated.
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