8 million student loan borrowers will see their repayment frozen for the next 6 months: find out if you are one of them
The SAVE student loan repayment is in legal limbo but those who are signed up can take advantage of forbearance at least into 2025. Here’s what to know.
The Biden-Harris administration has been working to give student loan borrowers relief from their debts incurred to get a higher education. After the broad debt forgiveness for up to $20,000 measure was shot down by the Supreme Court last year, the US Department of Education rolled out an alternative.
That proposal, called the Saving on a Valuable Education (SAVE) Plan, was also challenged in the courts this time led by Republican attorneys general in Kansas and Missouri and blocked from being implemented in July. When the Supreme Court, in August, declined to lift the block on parts of the new debt relief plan for student loan borrowers the Biden-Harris administration paused repayments for the roughly 8 million already signed up to the SAVE Plan.
8 million student loan borrowers will see their repayment frozen for the next 6 months: find out if you are one of them
While the injunction on the SAVE Plan (previously known as REPAYE) is in place, you can still apply for it and other Income-Driven Repayment (IDR) Plans. Those that apply for SAVE will be placed in general forbearance once processed according to the Depratment of Education.
This forbearance will last until at least late February, or the legal challenges are resolved according to the Department of Education. During this general forbearance, while you are not required to make payments and interest will not accrue on repayments under SAVE plans, these non-payments will not count towards IDR or PSLF forgiveness.
However, you, or your employer on your behalf, may still make payments during this period that “will be applied to future bills due after this forbearance ends.”
On the other hand, be aware that while the injunction is in place, no new enrollments are being accepted for PAYE or ICR Plans, with the exception of “borrowers with a consolidation loan that repaid a parent PLUS loan can continue to enroll in the ICR Plan (but not the PAYE Plan),” states the US Department of Education.
You can check the status of your IDR application through Federal Student Aid. As well you can look at the other options available for repaying student loans through the Department of Education’s office of student financial aid.