Update as of 10/31/24
A federal court issued an injunction preventing the U.S. Department of Education from implementing parts of the Saving on a Valuable Education (SAVE) Plan and other IDR plans, including— for example— SAVE’s monthly payment formula and loan forgiveness under SAVE, PAYE, and ICR plans. Please check this page and StudentAid.gov/SAVEaction for additional information as developments occur.
Below is an update on what borrowers can expect in the coming months.
Student Loan Borrower Q&A
I am enrolled in the SAVE Plan. What does the court’s injunction mean for me?
Borrowers in SAVE and anyone who has applied for SAVE should expect to remain in interest-free general forbearance for six more months or longer, pending further developments from the 8th Circuit Court of Appeals. While in forbearance, you do not have to make monthly payments on your student loans. Interest will not accrue during this forbearance. Time spent in this forbearance does not provide Public Service Loan Forgiveness (PSLF) and Income Driven Repayment (IDR) credit. Borrowers should see additional information below.
You have been placed into this general forbearance because your servicer is not currently able to bill you at the amount required by a recent court order. The Department is working with servicers and contractors to update their systems to align with the terms of the SAVE plan, based on the terms of the injunction. This process will take several months. This timeline will give borrowers the opportunity to make another choice for repayment, based on which of the updated options is best for them. See below for more information on repayment plans.
Borrowers, and employers on borrowers’ behalf, can make a payment during this forbearance. That payment will be applied to future bills due after this forbearance ends.
Borrowers who do not want to be in this forbearance can contact their servicer to change repayment plans. There may still be forbearance associated with changing to certain repayment plans. See below for more information.
Borrowers should be aware that forgiveness as a feature of any IDR plan created by the Department – specifically, the SAVE (formerly REPAYE), PAYE, and ICR repayment plans -- is currently enjoined.
How does forbearance affect me?
The conditions of forbearance differ based on the borrower’s status.
If you are in the SAVE forbearance: As described above, the Department has placed borrowers currently enrolled in SAVE (previously known as REPAYE) into a general forbearance because their servicers are not currently able to bill them at the amount required by a recent court order. Under this forbearance, which will last until servicers are able to send bills to borrowers at the appropriate monthly amount, interest will not accrue. Furthermore, time spent in this general forbearance will not provide PSLF or IDR credit.
If you are in a processing forbearance: As described below, servicers may place borrowers into a different forbearance category, known as processing forbearance, if the servicers need additional time to process those borrowers’ applications to enroll in IDR, recalculate their payments on an IDR plan or recertify their incomes for their IDR plan. In contrast to the general forbearance for borrowers enrolled in SAVE (previously known as REPAYE), interest will accrue while a borrower is in processing forbearance. Additionally, time spent in processing forbearance (up to 60 days) is eligible for PSLF and IDR credit. Processing forbearance will last no longer than 60 days, at which point a borrower may be placed into general forbearance under the terms described for that status.
I want to enroll in the SAVE Plan or another IDR plan or consolidate my loans. What do I need to know?
Borrowers may apply for IDR plans and/or to consolidate loans by visiting here and here. Alternatively, borrowers continue to have the option of submitting a paper application by downloading and printing a PDF form. Borrowers should be aware that forgiveness as a feature of any IDR plan created by the Department is currently enjoined. That includes the SAVE (formerly REPAYE), PAYE, and ICR repayment plans.
Right now, most borrowers may only apply for the following IDR: SAVE (previously known as REPAYE) and Income-Based Repayment (IBR). There is one exception: borrowers with a consolidation loan that repaid a parent PLUS loan can continue to enroll in the ICR Plan (but not the PAYE Plan).
Borrowers are still permitted to apply for IDR plans, including SAVE (previously known as REPAYE), even though the court has enjoined some of the SAVE and other IDR plan provisions, including forgiveness. The Department is working with servicers and contractors to update their systems to align with the terms of the SAVE plan, based on the terms of the injunction. This process will take several months. Ultimately, the terms of the SAVE Plan and other IDR plans are subject to the outcome of ongoing litigation.
The Department is preparing a plan that would open the PAYE and ICR repayment plans to new enrollees, who otherwise meet the eligibility requirements. Doing so will allow the Department to meet its obligations under the Higher Education Act to offer borrowers a repayment option through the same authority used to create the SAVE plan. For borrowers who would prefer to make payments during this time period -- such as borrowers pursuing PSLF or low-income borrowers who would owe no monthly payments -- enrolling in PAYE or ICR may be an option to consider. The Department will share more in the coming weeks on the timeline for this repayment plan change.
We encourage borrowers to review the specifics of each IDR plan as borrowers make the best choices for their circumstances. For example, if a borrower enrolls in IBR and then moves to a different repayment plan, accrued and unpaid interest will capitalize.
In the coming weeks, the Department expects servicers to begin processing certain IDR applications that were paused following court orders affecting the terms and availability of IDR plans.
Specifically, the Department will begin processing borrower’s applications to enroll in:
- IBR;
- ICR and PAYE received prior to July 1, and
- ICR received from parent borrowers at any time.
Servicers will also process applications for recalculations for IBR, ICR, and PAYE. Servicers will have applications in the queue that will take some time to work through. Processing for all other applications, including SAVE (formerly known as REPAYE) applications and applications where borrowers checked “lowest monthly payment” will remain paused. Borrowers should check back here for updates.
If servicers need time to process a borrower’s IDR application, servicers will move the borrower into a processing forbearance for up to 60 days. Interest accrues during this short-term processing forbearance, and time in the processing forbearance is eligible for PSLF and IDR forgiveness. If the borrower’s application is not processed by their servicer within 60 days, the borrower will be moved into a general forbearance that does not count toward PSLF or IDR until their application is processed. Interest will not accrue in this general forbearance.
In reviewing their IDR options, borrowers may find the below table helpful:
| IDR Plans Created by Congress | IDR Plans Created by the Department | |||
| 2007 IBR | 2010 IBR | PAYE | ICR | SAVE (formerly REPAYE) |
Existing Enrollees | Payments due | Payments due | Payments due | Payments due | Loans in forbearance |
New Enrollees | Open | Open for new borrowers after July 1, 2014 | Closed to new enrollment, but work is underway that would open this fall. | Can only enroll consolidation loans that repaid a parent plus loan
Otherwise closed to new enrollment, but work is underway that would open this fall. | Open. Enrolling borrowers will be placed in forbearance. |
Loan Forgiveness | Yes | Yes | Temporarily enjoined. Otherwise-eligible loans placed in forbearance. | Temporarily enjoined. Otherwise-eligible loans placed in forbearance. | Temporarily enjoined. Otherwise-eligible loans placed in forbearance. |
Interest accrual | Yes | Yes | Yes, with greater accrual on subsidized loans for some borrowers as part of the litigation | Yes | Interest benefit enjoined; Interest does not accrue for borrowers in the litigation forbearance |
Progress toward IDR or PSLF credit | Yes | Yes | Yes | Yes | Payments on SAVE provide credit; litigation forbearance does not provide credit. |
Borrowers can find more information:
- About the latest developments in the litigation over the SAVE Plan: SAVE Plan Court Actions: Impact on Borrowers | Federal Student Aid
- About how to apply for IDR or for a consolidation loan: SAVE Plan Court Actions: Impact on Borrowers | Federal Student Aid
Is Department processing IDR Forgiveness?
Forgiveness as a feature of any IDR plan created by the Department is currently enjoined. That includes the SAVE (formerly REPAYE), PAYE, and ICR repayment plans. Borrowers who reach their plan’s repayment milestone—that is, 25 years in repayment for borrowers on any of these plans or 20 years for borrowers in PAYE or undergraduate-only borrowers in SAVE — will be moved into an interest-free forbearance, if they are not already in a forbearance as a result of the litigation.
The Department can and will still process loan forgiveness for the Income-Based Repayment (IBR) repayment plans, which were separately enacted by Congress.
I am enrolled in the SAVE Plan. Is there any way for me to earn credit toward Public Service Loan Forgiveness during this time?
Although the general forbearance for borrowers enrolled in SAVE does not count toward PSLF, there are currently two ways borrowers may be able to receive PSLF credit. Borrowers should review these options closely before taking any action.
- Buy Back Credit:
The Department is continuing to improve operations for the PSLF Buy Back program. Some borrowers may be eligible to “buy back” months of PSLF credit for time spent in forbearance as a result of the court’s injunction. Borrowers with 120 months of eligible employment can buy back months that were not originally counted as qualifying payments because the borrower was in an ineligible deferment or forbearance status. Borrowers must submit a buyback request and make an extra payment of at least as much as what borrowers would have owed under an income-driven repayment (IDR) plan during the months they are trying to buy back. Borrowers can buy back these months only if:
- they still have an outstanding balance on their loan(s), and
- they have approved qualifying employment for these same months, and
- buying back these months will complete their total of 120 qualifying PSLF payments.
This is a new process that the Department began making available last fall. Borrowers can find more information, including how to buy back months and about eligibility, here.
Note: borrowers who have consolidation loans can buy back months only on the current consolidation loan. These borrowers cannot buy back months from the loans included in the consolidation loan or for any period prior to the first disbursement date of a consolidation loan.
- Enroll in a different PSLF eligible repayment plan:
Borrowers can apply to enroll in a different PSLF eligible repayment plan. We encourage borrowers to look at the specific terms of each plan to make the best choice for their individual situation.
Different IDR plans may require higher monthly payments than the SAVE Plan does, and – in the case of Income Based Repayment (IBR) – borrowers who later leave them may face interest capitalization. Payments made under these IDR plans will count toward forgiveness under IDR and PSLF.
The Department is preparing a plan that would open the PAYE and ICR repayment plans to new enrollees, who otherwise meet the eligibility requirements. Doing so will allow the Department to meet its obligations under the Higher Education Act to offer borrowers a repayment option through the same authority used to create the SAVE plan. For borrowers who would prefer to make payments during this time period -- such as borrowers pursuing PSLF or low-income borrowers who would owe no monthly payments -- enrolling in PAYE or ICR may be an option to consider. The Department will share more in the coming weeks on the timeline for this repayment plan change.