These Arizona Borrowers Could See Student Loan Payments Skyrocket

When I was in high school, my teachers told me that a college education was a valuable investment. I took AP classes and college prep courses to prepare for my future.

Getting ready for college and the reality of paying for college are two separate conversations. Some colleges and organizations can't hand students money fast enough through grants, scholarships, and other incentives. A lot of programs are income or circumstance-based. The average borrower may not fall into any of the categories.

When most apply for student loans, they don't always consider how they'll repay the often-hefty price tag for a college education. Student loans offer a short-term solution that often has long-term consequences.

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The Controversial  SAVE Plan for College Education

For most of his time in office, Joe Biden has been rumbling about student loan forgiveness—a policy that has brushed up against controversy, mostly from people who've spent decades repaying their own student loans or pushed back because they felt salty about their tax-payer funding going toward paying for other's student loan decisions.

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What is the SAVE Program?

Biden's SAVE program, known as the Saving on a Valuable Education Plan was essentially his end run around the highly criticized loan forgiveness program he had been proposing.

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SAVE is currently on hold due to legal challenges. The courts issued an injunction that prevents the U.S. Department of Education from implementing parts of the plan,  specifically the part that includes the monthly payment formula based on income and loan forgiveness.

Why the SAVE Loan Plan is Likely to End

With all the controversy and legal battles surrounding this program, the new administration will likely put a stop to Biden's student loan forgiveness. The Republican-led states have argued that Biden overstepped his authority.

Arizona families who are part of the SAVE program, primarily low and middle-income borrowers, may have benefited from the lower monthly payments.

For some, if the SAVE program ends, certain borrowers could see their payments double or even triple. Arizona bowers who make under $15 an hour, currently enjoy $0 monthly payments under SAVE; no one knows exactly how the changes will affect them in the future.

Income-Based Repayment

One of SAVE's features is the income-based repayment plan, which is an attractive option for those who are just starting out or who may have trouble beginning their careers due to their educational choices.

Either way, as this plan is phased out, Arizona's students and families will likely see a significant change.

Sources: Forbes | Ed Financial Student Aid | StudentAid.gov