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If your student loans are tied up in the paused SAVE repayment plan, you're not alone. Many borrowers are navigating the uncertainty of legal challenges, court rulings, and evolving guidance from the Department of Education. But there are options, and understanding them can help you make the best choice for your situation.
What's going on with SAVE?
The SAVE (Saving on a Valuable Education) plan, rolled out last year, promised reduced payments, protections from ballooning interest, and even student loan forgiveness for small-debt borrowers after 10 years. Unfortunately, lawsuits have thrown the plan into limbo, leading to an injunction and leaving borrowers in interest-free forbearance. The catch? While no payments or interest are required, the months in forbearance don't count toward forgiveness programs like Public Service Loan Forgiveness (PSLF).
According to recent guidance, this forbearance could last another six months or more. As the Education Department works on long-term solutions, borrowers are left deciding what steps to take.
Staying the course or switching plans
If you're on SAVE and content with not making payments for now, you can wait out the court's decision. However, if you're pursuing PSLF or other forgiveness programs, there are strategies to keep progressing.
1. Switch to Another IDR Plan
Borrowers can switch to plans like Income-Based Repayment (IBR) or Income-Contingent Repayment (ICR). While these plans may have higher payments or less favorable terms than SAVE, they allow you to keep accruing forgiveness credit. Applications for these plans are expected to resume soon.
2. PSLF "Buy Back" Option
For those with eligible PSLF employment, the "Buy Back" program lets you retroactively count non-qualifying forbearance months by making payments equal to what you would've owed under an IDR plan. This can help you regain ground lost during the SAVE forbearance period.
Future workarounds
The Department of Education is exploring solutions like an IDR Buyback program, modeled after PSLF's, to reclaim paused periods for forgiveness credit. This, however, isn't expected until late 2025.
Beware of scams
Unfortunately, scammers are targeting borrowers with promises of expedited forgiveness or reduced payments. Remember, you don't need to pay anyone to manage your loans. Trust only official channels like the Department of Education or trusted organizations like the Student Loan Empowerment Network for assistance.
When in doubt, keep records of all communications and documents, and know your rights as a borrower under protections like California's Student Borrower Bill of Rights. While the path forward may feel murky, resources and strategies are available to keep you on track.