SAVE Applicants Caught in Political Crossfire

Millions of student loan borrowers are currently in forbearance while the fate of the SAVE income-driven repayment (IDR) plan is being debated in court. While those borrowers’ loans are in limbo, they’re not progressing towards IDR forgiveness or PSLF, but—thankfully—are also not garnering interest. With the recent election of Donald Trump to a second term in the Oval Office, it seems unlikely that SAVE will ever see the light of day. So if you’re one of the millions of borrowers who applied for SAVE, how do you get back on track with your repayment, especially if you’re pursuing loan forgiveness? 

Old IDR Plans Back in Play

With SAVE on the chopping block, borrowers will need to look to older IDR plans to get back in repayment. Two former plans, ICR and PAYE, were discontinued when SAVE was created, but are coming back soon. REPAYE was eliminated with the creation of SAVE, and there is no talk of reviving it. That leaves Income-Based Repayment (IBR) as the only repayment plan that is immediately available to borrowers who want to switch from SAVE. Unfortunately, IBR doesn’t offer quite as advantageous an income ratio: 10% of discretionary income for loans issued after June, 2014; or 15% of discretionary income for loans before that. Come December 16th, both PAYE and ICR plans will be available for borrowers again. PAYE requires 10% of discretionary income, but is only available for loans issued after September, 2007. ICR is available for all Direct federal loans—including Parent PLUS Loans—but requires 20% of your monthly discretionary income. 

Stuck with SAVE? What to Do?

If you’re one of the millions of borrowers currently stuck in forbearance with SAVE, you may be wondering what to do! There are a few options, but there’s no one-size-fits-all solution for everyone. The best course of action is to talk to your student loan professional, who can give you the most up-to-date information on where things stand with IDR plans. They can help you come up with a plan that’s best for your particular situation. If you’re pursuing PSLF, you probably want to get on to IBR or PAYE, but it will depend on the age of your loans. If you’re pursuing IDR forgiveness, but have a lot of time left in repayment, your decision may depend on when you need to recertify your income. 

Borrowers with federal student loans are caught in a strange place right now, and there’s no clear path forward for many. At times like this, try to take a step back and breathe! We’re always just an email or phone call away. Lean on your student loan navigators to help you find the right path—it’s what we’re here for!