Student loan repayments have been in limbo since a court decision earlier this year blocked the Biden administration from implementing certain aspects of the Saving on a Valuable Education (SAVE) Plan and other income-driven repayments (IDR) plans.
With the Biden Administration coming to an end next week, you may be wondering what that means for your student loan repayments.
Continued Forbearance
The Department of Education (DOA) announced yesterday that borrowers will continue in general forbearance as servicers work on recalculating amounts owed and issuing updated bills. The DOA expects that it will take servicers at least until September 2025 to get their systems prepared. Further, they anticipate that it may not be until December 2025 that the first bills are due. This means that student loan borrowers have at least another seven to nine months to prepare for student loan repayment.
What New Student Loan Repayment Plans Are Available?
Borrowers are still allowed to apply for any of the the IDR plans below:
- Saving on a Valuable Education (SAVE) [formerly known as REPAYE]
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR) and
- Income-contingent repayment (ICR)
It is important to know that the terms of these plans are subject to change based on ongoing litigation.
The chart below summarizes the Department of Education’s announcement.
Resources
- ED.GOV https://www.ed.gov/higher-education/manage-your-loans/save-plan
- SAVE Action Information https://studentaid.gov/announcements-events/save-court-actions
