The 8th Circuit Court of Appeals has updated its temporary stay of the Saving for a Valuable Education (SAVE) income-driven repayment (IDR) plan and issued a preliminary injunction formally blocking SAVE. The Department of Education will place all borrowers currently enrolled in SAVE into an interest-free forbearance period.
Loan servicers will contact borrowers impacted by this decision. The forbearance period will not count toward forgiveness. Those borrowers will not be required to make payments while the Department of Education appeals the decision.
The Department is defending the SAVE plan in the 8th and 10th Circuits. The appeals will likely escalate up to the Supreme Court.
Borrowers Can Still Apply for an IDR Plan
StudentAid.gov has temporarily taken down its online IDR application process and is asking borrowers interested in applying for an IDR plan and/or consolidation to submit a PDF application to their servicer.
Borrowers can apply for the following income-driven repayment (IDR) plans: Pay As You Earn (PAYE), SAVE (previously known as REPAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). Each plan has slightly different terms for different circumstances. Please get in touch with an IonTuition counselor to discuss which plan is best for your situation.
Biden-Harris Administration Pushing a Separate Student Loan Debt Relief Initiative
The Biden-Harris administration is hoping to provide student loan forgiveness to borrowers who…
- experience runaway interest
- would have qualified for forgiveness under an IDR plan or PSLF but haven’t enrolled
- have been in repayment for at least 20 years
- enrolled in “low-financial-value programs”
The Department of Education emailed approximately 25 million student loan borrowers who may qualify for debt relief and informed them that forgiveness would be automatically provided unless they opt out with their servicer by August 31st.
The Administration first proposed this plan in April and hopes to have finalized rules authorized this fall.
If you have questions about your student loan repayment, please connect with an IonTuition counselor through our online portal.