SAVE Plan Suspended

On July 18, 2024 a federal appeals court blocked the SAVE Repayment Plan. If you’re enrolled in the plan, you’re probably confused. That’s fair.

This article is for borrowers enrolled (or interested) in the SAVE Plan. We want to help you navigate the known versus the unknown.

What We Know

If you’re on SAVE, your payments are paused – The Department of Education (ED) has put all SAVE Plan borrowers into an interest-free forbearance. You’ll stay in forbearance until the courts reach a final decision. That means you won’t make payments and your loans won’t grow due to interest.

No IDR applications are being processed – You can apply for the SAVE plan using the online application tool, but your request will not be processed by your loan servicer. Servicers have temporarily suspended processing while cases against SAVE are active. In the meantime, they are placing IDR applicants in forbearance. Forbearance pauses monthly payments for a limited time. Once the courts issue a final decision regarding SAVE, servicers will resume IDR application processing.

The court ruling is not final – The case against SAVE is ongoing. A final judgement may take months. Here are the most recent updates:

• Aug. 9, 2024 - The 8th District Court of Appeals completely blocked SAVE and limited borrowers’ access to other IDR plans.
• Aug. 28, 2024 – The Supreme Court refused a request by ED to restore SAVE and indicated it expected a more complete ruling by lower courts.

What We Don’t Know

When will payments on SAVE Plans resume? – We aren’t certain, but we expect it will take months. This is not going to be a fast process.

What will happen if SAVE is struck down? – It’s unclear how ED will react if the courts find the SAVE program illegal. They’re currently reviewing their options.

Actions You Can Take Now

Update your contact info – ED and your loan servicer will try to update you as the situation develops. They’ll use whatever contact info you have on file, so make sure it’s current. Log in to both StudentAid.gov AND your servicer’s website to make any changes.

Make sure your account goes into forbearance – Don’t slip through the cracks! Check your account on StudentAid.gov and your loan servicer’s website to be sure your loans are put into forbearance.

Create a buffer – It’s uncertain whether SAVE will survive this legal challenge. It’s a good idea to use your forbearance to build a bit of a financial buffer. That will help you respond to the courts’ final decision.

If you have questions or need help managing your loans, call Student Connections. Our Borrower Advocates will listen to your needs and do their best to help. This service is paid for by schools across the country and is free to you. Call us today at (866) 311-9450.