SAVE Borrowers in Limbo

The Saving-on-a-Valuable-Education (SAVE) plan was touted as an opportunity for student loan borrowers to save money on their payments, avoid runaway interest, and work toward a reasonable path out of repayment for borrowers with small balances. It was quickly targeted by lawsuits, however, and is currently frozen while it awaits action from an appeals court.

The millions of borrowers who applied for SAVE plans, meanwhile, are caught in the political crossfire with their loans in administrative forbearance.

Thankfully, while their payments are frozen, interest is also not accruing. Unlike the forbearance they experienced during the Covid-19 pandemic, however, these months are not counted towards IDR Forgiveness or Public Service Loan Forgiveness (PSLF). 

How to Get Your Student Loans Back on Track

Borrowers who enrolled in SAVE will need to change their IDR plan to resume repayment and continue advancing toward loan forgiveness. While still enrolled in SAVE, borrowers do not have to make payments, aren’t accruing interest, and don’t have to recertify their income until 2026. Some borrowers may be hoping to take advantage of the PSLF Buyback program, which allows borrowers who have been in repayment for 120 or more months to retroactively pay for months in which they weren’t making payments that otherwise would have qualified toward PSLF. Unfortunately, there’s no guarantee that this Biden Administration program will last indefinitely, so we don’t recommend taking that route. Borrowers should instead apply for a new IDR plan on studentaid.gov. and select from one The remaining three available plans, PAYE, IBR, and ICR, are each a little different and different borrowers may not qualify for all of them. 

Give us a call and we’ll help you find the best path off of SAVE and on to a new IDR plan. Based on your situation, you may want to consider when you file your taxes in relation to applying for a new plan. Your student loan guide will be able to help you compare options and put you on track to save in a post-SAVE world.