The Biden administration's SAVE plan, touted as the most affordable student loan plan ever, has been put on hold amidst legal challenges and controversy. The program, which offers lower monthly payments and quicker debt erasure for those with small balances, has faced criticism from Republican-led states who argue that the Department of Education overstepped its authority.
Despite the legal challenges, the Education Department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE plan. Those who have already received relief are not impacted by the pause in the program.
During this payment pause, months will not count towards borrowers' timeline to loan forgiveness. Borrowers pursuing forgiveness options such as income-driven repayment plans or Public Service Loan Forgiveness may not receive credit for this period of non-payment.
However, borrowers have options to explore, such as the Education Department's buyback option for those working towards Public Service Loan Forgiveness. Additionally, borrowers may consider switching to another income-driven repayment plan to maintain credit for the months spent in forbearance.
While the pause in the SAVE program may delay debt forgiveness for some borrowers, they are still benefiting from a $0 monthly payment during this time. Despite the challenges and uncertainties surrounding the program, borrowers are encouraged to explore their options and work with their loan servicers to navigate the changing landscape of student loan repayment.