Student Loan Borrower Q&A
A federal court issued an injunction preventing the U.S. Department of Education (Department) from implementing parts of the Saving on a Valuable Education (SAVE) Plan and other income-driven repayment (IDR) plans. Further developments are possible while the SAVE Plan remains under litigation. Please check StudentAid.gov/SAVEaction and ed.gov/SAVE for additional information as developments occur. This page was last updated August 26, 2024.
I am enrolled in the SAVE Plan. What does the court’s injunction mean for me?
You are being placed into a general forbearance because your servicer is not currently able to bill you at the amount required by a recent court order. The court order is preventing the Department from offering the SAVE Plan while litigation continues.
Interest will not accrue during this forbearance.
Time spent in this forbearance does not count toward Public Service Loan Forgiveness (PSLF) and IDR forgiveness.
Borrowers will be in this forbearance until the legal situation changes or servicers are able to send bills to borrowers at the appropriate monthly payment amount.
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 will still be forbearance associated with changing to certain repayment plans. See below for more information.
If you believe that you are close to qualifying for forgiveness of your loan under PSLF, please see additional information below.
How does forbearance affect me?
The conditions of forbearance differ based on the borrower’s status.
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 the legal situation changes or 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 count for PSLF or IDR forgiveness.
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’ IDR applications. 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 the recent court rulings mean for me?
Borrowers may apply for IDR plans and/or to consolidate loans by submitting a PDF application. IDR applications can be submitted to your servicer by uploading it to your servicer’s website or mailing or faxing it to your servicer. Borrowers can find information on submitting an application to consolidate their loans here. Due to the injunction, the online IDR and consolidation loan applications on studentaid.gov are temporarily not available. We will inform borrowers when the online IDR and consolidation plan applications will be available in a timely fashion.
Borrowers may apply for the following income-driven repayment (IDR) plans: SAVE (previously known as REPAYE) and Income-Based Repayment (IBR). See here for a description of these student loan repayment plans. We encourage borrowers to review the specifics of each IDR plan as borrowers make the best choices for their circ*mstances. For example, if a borrower enrolls in IBR and then moves to a different repayment plan, accrued and unpaid interest will capitalize.
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. The terms of the SAVE Plan and other IDR plans are subject to the outcome of ongoing litigation.
Borrowers should note that under the court’s injunction, no new enrollments are being accepted for the PAYE or ICR Plans, with two exceptions: borrowers who applied for the PAYE or ICR Plan before July 1, 2024, and borrowers who applied for the PAYE or ICR plan between July 18 and August 9, if approved for that plan, and 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 should also note that, as result of the injunction, servicers have temporarily paused processing of IDR applications until we can ensure applications are processed correctly. Borrowers should expect a lengthy delay in processing of applications, especially for borrowers applying for SAVE/REPAYE. We do not currently have an estimate of how long this will take. Borrowers should check back for updates on studentaid.gov.
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 it is eligible for PSLF and IDR for up to 60 days. If the borrower’s application is not processed within in 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.
Finally, once applications are processed, borrowers who are enrolled in the SAVE Plan may be placed in a general forbearance if litigation remains ongoing or servicers cannot calculate payments at the amounts required by court orders. In this general forbearance, interest will not accrue, and time spent in this general forbearance will not count toward PSLF or IDR forgiveness.
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 IDR Plans: Income-Driven Repayment Plans
- About how to apply for IDR or for a consolidation loan: SAVE Plan Court Actions: Impact on Borrowers | Federal Student Aid
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:
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 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 you’re 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 disbursem*nt 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. Please see above for more information. Different IDR plans may require higher monthly payments than the SAVE Plan does, and – in the case of some IDR plans – borrowers who later leave them may face interest capitalization. However, payments made under these IDR plans will count toward forgiveness under IDR and PSLF.
As noted above, servicers have temporarily paused processing of applications to enroll in a new or different IDR plans until we can ensure applications are processed correctly. 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 it is eligible for PSLF and IDR for up to 60 days. If the borrower’s application is not processed within in 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.
