Are you struggling to make your student loan payments? If you’re enrolled in the Biden administration’s new income-driven repayment plan, known as SAVE, then you’re in luck. The U.S. Department of Education is placing federal student loan borrowers in SAVE into an administrative forbearance, meaning you won’t have to make any payments on your debt while the legal battle involving SAVE plays out. This also means that interest won’t accrue on your loans during this period.
What makes the SAVE plan so controversial? Since its introduction in 2023, the program has been under fire for being too generous. It offers lower monthly payments than any other federal student loan repayment plan and leads to quicker debt erasure for those with small balances. Republican-led states have sued the Education Department, arguing that the agency overstepped its authority with SAVE.
However, a federal appeals court in Missouri issued a ruling blocking the entire plan on July 18. Despite this setback, Education Department officials are fighting to protect the plan, but its future remains uncertain.
If you’re enrolled in SAVE and hoping to have your debt cleared under the income-driven repayment plan’s terms or Public Service Loan Forgiveness, that progress will be paused during this forbearance. While borrowers cannot opt out of this forbearance, they can explore other repayment plan options. However, that may lead to a higher monthly loan payment.
Stay informed and stay tuned to our site, Extreme Investor Network, for the latest updates on the SAVE plan and other personal finance news. We are dedicated to providing you with valuable insights to help you navigate your financial journey.