Implementation of the SAVE Plan has been blocked by a federal appellate court. Borrowers cannot enroll in the SAVE Plan until further notice.
The Department of Education has announced that if you are already enrolled in the SAVE Plan, your account will be moved into interest-free forbearance pending the resolution of lawsuits challenging the Plan. While your account will not accrue interest, during this time you will not earn credit toward Income-Driven Repayment or Public Service Loan Forgiveness (PSLF). You should hear from your loan servicer or from the Department of Education in the coming days.
The Biden-Harris Administration has stated it will continue to aggressively defend the SAVE Plan in court and pursue all available tools to reduce the burden of student loans on borrowers across the country.
The Department of Education has established several Income-Driven Repayment (IDR) Plans over the years, which calculate monthly payments based on income and family size, often leading to lower monthly payments for student loan borrowers.
Prior to far-right legal challenges, the SAVE Plan proved to be incredibly popular and effective. 7.5 million borrowers had already started benefitting from the Plan, including 4.2 million borrowers who were paying $0 per month!
SAVE Plan Highlights
The Biden-Harris Administration’s SAVE Plan would make repayment much more affordable by:
- Reducing most borrowers’ monthly payments by increasing the income exempt from payment calculations from 150% to 225% of the federal poverty line.
- Limiting payments for borrowers with only undergraduate loans to no more than 5% of their non-exempt income.
- Providing that enrollees with undergraduate and graduate loans will pay a weighted average of between 5% and 10% of non-exempt income based on the original principal balances of their loans.
- Preventing interest accrual as long as you make your monthly payment, even if your payment is $0
Have further questions?
NEA members can consult student debt experts through the Student Debt Navigator for free assistance with student debt issues, including questions about SAVE and applying for Public Service Loan Forgiveness (PSLF).
For the latest news on student debt relief, text STUDENTDEBT to 48744. You will receive important updates and invitations to upcoming events and webinars.
