Student loan borrowers are confused over the SAVE plan, the new income-driven repayment (IDR) option scheduled to be fully rolled out earlier this month.
The Saving on a Valuable Education (SAVE) Plan was a keystone in the Biden administration’s promise to provide student loan debt relief to borrowers but has faced numerous legal challenges.
The SAVE Plan’s Purpose
The SAVE plan launched in October to replace REPAYE. July 1st marked the date when borrowers on the SAVE plan would see a recalculation of payments based on 5% of their discretionary income instead of 10%. This move would have potentially cut some payments in half.
The SAVE plan also includes a quicker path to forgiveness. If you borrowed $12,000 or less, the SAVE plan would grant forgiveness after 10 years of payments. The current IDR plans don’t grant forgiveness until 20-25 years.
Legal Challenges Have Halted Forgiveness on SAVE
Two lawsuits filed by GOP-led states blocked the SAVE plan temporarily. As of today, Federal courts have allowed continued implementation of most provisions of the SAVE Plan. Borrowers can still enroll in SAVE or other IDR plans and/or consolidate loans. The Presto tool on IonTuition makes it easy for borrowers to apply for SAVE.
However, the SAVE Plan’s shortened time to loan forgiveness is on hold while the court challenges continue.
According to The Hill, Republicans have filed an emergency motion to the Supreme Court to stop the SAVE plan.
IonTuition is Simplifies the Chaos
Student loan borrowers are stressed out enough just having to make payments, they shouldn’t need to worry about politically-driven changes to their plans.
At IonTuition, we’re helping borrowers find the best repayment options available and giving them peace of mind that they’re on the best path to eliminate their debt as quickly as possible.