On July 18, 2024, a federal court issued an order preventing the Department of Education from operating the income-driven repayment plan called SAVE. The SAVE plan will remain paused while the court considers a case brought by several state attorney generals seeking to end this plan. While the order is in effect, servicers are not permitted to bill borrowers at the amount set by their SAVE plan. As a result, borrowers on SAVE are being placed into forbearance until the legal situation is resolved. During this forbearance, interest will not accrue, but time in this status does not count toward Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment Forgiveness (IDRF).
Borrowers who do not want to be in this forbearance can change repayment plans. However, as a result of the administrative stay, borrowers are advised to expect lengthy delays in the processing of IDR applications. Most borrowers will be eligible to submit a request under the PSLF buyback program to receive retroactive credit, but this request cannot be made until a borrower has reached 120 months of approved qualifying employment.
Additionally, the Department of Education recently finalized regulations that would offer new relief to four categories of borrowers: those who owe more now than at the start of repayment, those who first entered repayment before 2005, those who enrolled in low financial-value programs, and those who are otherwise eligible for loan forgiveness but have not yet applied successfully. These regulations have also been challenged in court, and on October 3, 2024, a federal judge issued a preliminary injunction preventing these programs from being implemented until the legal challenges are resolved. This order does not affect any existing programs, such as PSLF or IDRF.
For over 13 years, The Student Loan Help Group has been helping borrowers understand their student loan repayment and forgiveness options. With the nation’s top team of counselors and processors, borrowers can find the forgiveness they deserve and see themselves debt-free faster.
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