Can the SAVE student loan plan be saved?
Democratic lawmakers are attempting a rescue.
“It has no chance of passage in a Republican-controlled Congress,” said financial aid expertMark Kantrowitz.
“Borrowers should not count on it.”
The SAVE plan has been nearing its demise and Kantrowitz says it “has no hope of resurrection.”
With the end of SAVE nearing, borrowers are likely tosee their payments increaseand chances for loan forgiveness dwindle.
What would the SOAR Act student loan plan offer?
The SOAR Act would create a new income-driven repayment plan that would build on the SAVE plan.
For other borrowers, SOAR would forgive loans after 15 years.
Interest benefits:Similar to SAVE, the SOAR plan would cover unpaid interest from month to month.
Additionally, it would apply half your monthly payment to your loan’s principal amount.
More loans eligible:SOAR would accept all federal loan types, including Parent PLUS loans.
Parent PLUS loans were not eligible for SAVE, even if they were consolidated first.
How does this affect PSLF?
The SOAR plan would work in tandem with PSLF as a qualifying repayment plan.
If you’re pursuing PSLF, however, don’t count on SOAR becoming law.
You’ll need to get your loans on another IDR plan to qualify for forgiveness.
If you’ve already reached the 10-year mark, you could also explore thePSLF Buyback program.
Is there any hope for SAVE?
Thefate of SAVEis not looking promising.
As a result of the court’s ruling, ICR and PAYE also no longer lead to loan forgiveness.
What can I do if I’m a SAVE borrower?
If you’re a SAVE borrower, you’ll likely see your payments restart soon.
Being proactive can help you prepare for this new financial reality.
Make note of your balance, interest rate, monthly payment amount and payment due dates.
Ensure that your loan servicer has your updated contact information so you don’t miss any important communications.
Compare your repayment plan options:These include standard repayment, graduated repayment and income-driven plans.
Reevaluate your budget:Check in with your finances to prepare for upcoming student loan bills.
Depending on your circumstances, you may consider pausing payments for longer through deferment or forbearance.
