"These borrowers confront a policy landscape marked by uncertainty and change. In 2023, the Biden administration rolled out the Saving on a Valuable Education (SAVE) plan by automatically enrolling borrowers who were participating in the Revised Pay as You Earn (REPAYE) plan and encouraging borrowers from other IDR plans to enroll in SAVE. But in July 2024, a court halted implementation of the SAVE program and the Biden administration effectively stopped communicating with these borrowers."
"Moreover, a federal appellate court ruling raised the question of whether forgiveness under the Pay As You Earn (PAYE) and former REPAYE programs may be illegal, throwing extreme amounts of uncertainty into millions of borrowers' lives. Compounding uncertainty, a recent proposed settlement between the Trump administration and the state of Missouri would effectively end the SAVE program. However, borrowers cannot simply return to REPAYE and must apply to temporarily go to PAYE, as Congress has phased these programs out while creating another IDR plan called the Repayment Assistance Plan (RAP), which will launch this coming July."
"Unfortunately for current borrowers, the RAP plan is less generous, as monthly payments will likely be higher and forgiveness is delayed to 30 years instead of 20 to 25 years. Borrowers who must transition from SAVE could have to wait more than 25 months as millions of applications must be processed by ED, which has intentionally been hobbled. This layering of disruption compounds uncertainty on top of long-standing operational failings: Even when fully staffed, ED has a documented history of miscounting qualifying payments and other IDR tracking errors, mistakes that have already d"
About 13 million borrowers—roughly 39 percent of those serviced by the Department of Education—are enrolled in income-driven repayment (IDR) plans and face deep uncertainty after the student loan payment pause ended. SAVE was rolled out in 2023 with automatic enrollments from REPAYE, but a July 2024 court halted SAVE and communication stopped. A federal appellate ruling raised questions about PAYE and REPAYE forgiveness legality. A proposed settlement could end SAVE; RAP will replace older plans but is less generous with higher monthly payments and 30-year forgiveness. ED processing delays and tracking errors risk long waits and miscounted qualifying payments.
#student-loans #income-driven-repayment #save-plan #repayment-assistance-plan #department-of-education
Read at Inside Higher Ed | Higher Education News, Events and Jobs
Unable to calculate read time
Collection
[
|
...
]