{"id":8854,"date":"2023-10-10T20:11:45","date_gmt":"2023-10-11T00:11:45","guid":{"rendered":"https:\/\/scholarshipowl.com\/blog\/?p=8854"},"modified":"2023-12-13T16:26:39","modified_gmt":"2023-12-13T21:26:39","slug":"gen-z-insights-briefing-student-loan-repayment-with-the-save-plan","status":"publish","type":"post","link":"https:\/\/scholarshipowl.com\/blog\/gen-z-research\/gen-z-insights-briefing-student-loan-repayment-with-the-save-plan\/","title":{"rendered":"Student Loan Repayment with the SAVE Plan"},"content":{"rendered":"

ScholarshipOwl<\/a> conducts a survey every month to gain deeper insight about Gen Z students. In September, we asked students about their familiarity with the Biden Administration’s newest income-driven student loan repayment plan, the Saving on a Valuable Education (SAVE) Plan. Despite robust efforts to promote the plan via social media, unfortunately just 46% of the survey respondents indicated they were familiar with the plan.<\/p>\n

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Who participated in the survey?<\/b><\/h2>\n

In September 2023, ScholarshipOwl surveyed high school and college students on the ScholarshipOwl scholarship platform to learn more about their knowledge of the SAVE Plan. A total of 6,776 students responded to the survey.<\/p>\n

Among the respondents, 64% were female, 35% were male, and 2% identified themselves as other. Nearly half (46%) were Caucasian, 22% were Black, 18% were Hispanic\/Latino, 7% were Asian\/Pacific Islander and 7% identified as other.<\/p>\n

More than half (55%) of the respondents were high school students, with the vast majority high school seniors; over one-third (37%) were college undergraduate students, primarily college freshmen and college sophomores; 5% were graduate students and 3% identified themselves as adult\/non-traditional students.<\/p>\n

Survey questions<\/b><\/h2>\n

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The first survey question was \u201cAre you familiar with the Biden Administration’s new student loan repayment plan called the Saving on a Valuable Education (SAVE) Plan?\u201d Less than half (46%) said they were familiar with the SAVE Plan, with the rest of the respondents (54%) saying they were not.<\/p>\n

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We then asked, \u201cWhich of the following have you heard or read about the SAVE Plan? Check all that apply.\u201d<\/p>\n

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Nearly one-quarter (23%) said that they were aware that some borrowers who choose the SAVE Plan will qualify for $0 monthly payments. One-fifth (20%) had heard that if a student makes their monthly payment, their loan balance would not grow due to unpaid interest. One-fifth (20%) had heard that once the SAVE Plan is fully implemented in July 2024, monthly payments on undergraduate loans will be limited to 5% of the borrower’s discretionary income, rather than the current 10% cap. One-fifth (20%) are aware of the path to loan forgiveness available to students who choose the SAVE Plan – borrowers with an original principal balance of $12,000 or less will receive forgiveness after 10 years of timely payments; for each $1000 borrowed above that amount, an additional year of timely payments will be required for forgiveness, up to a maximum of 20 or 25 years. Unfortunately, 58% responded that they were not familiar with any of these aspects of the SAVE Plan.<\/p>\n

For the final survey question, we were interested in how much student debt respondents currently hold. Since high school students do not yet have student debt, we looked at the responses only from the students that have attended college now or in the past, totaling 3079 respondents. We asked these students, \u201cIn total, how much student debt do you currently hold?\u201d<\/p>\n

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Overall, more than three-quarters (76%) already have student debt. This is very concerning, as the majority of these respondents are in their first or second year of college, and may well take on even more debt before they graduate. One quarter (25%) of the respondents indicated they have less than $10,000 in student debt. More than one-sixth (17%) indicated they owe $10,000 to $20,000 in student debt, while 8% stated they owe $20,000 – $30,000 in student debt. Five percent (5%) hold $30,000 to $40,000 in student debt. Just over one-tenth (11%) owe $40,000 to $80,000 in student debt, with 3% indicating they owe more than $100,000 in student loans. Concerningly, 8% of respondents stated that they had no idea how much student debt they have. On the positive side, just under one-quarter (24%) stated that they currently do not have any student debt.<\/p>\n

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Key takeaways for Gen Z students<\/b><\/h2>\n

The survey results indicate that the Biden Administration’s marketing and social media campaign promoting the SAVE Plan has unfortunately been inadequate, with less than half of Gen Z students (46%) having any familiarity with this new repayment plan option. The SAVE Plan offers numerous benefits for Gen Z students – and in most cases, when borrowers look at all of their repayment options, the SAVE Plan will have significant advantage over the other plans:<\/p>\n

The SAVE Plan offers the following benefits right now:<\/h3>\n