Welcome to Extreme Investor Network, where we provide valuable insights on personal finance topics to help you make the most of your money. Today, we are diving into the controversial SAVE plan and why it is currently on hold.
The SAVE plan, introduced by the Biden administration in 2023, has been touted as “the most affordable student loan plan ever.” This income-driven repayment plan offers lower monthly payments and quicker debt erasure for those with small balances. Despite its benefits, the program has faced legal challenges from Republican-led states, alleging that the Department of Education overstepped its authority.
One key aspect of the current hold on the SAVE plan is that payments are not currently due. However, this forbearance period does not count towards borrowers’ timeline for loan forgiveness. For individuals hoping to get their debt cleared under the income-driven repayment plan or Public Service Loan Forgiveness, this pause may impact their progress. Elaine Rubin, director of corporate communications at Edvisors, suggests exploring options such as the buyback option for PSLF borrowers or transitioning to other income-driven repayment plans.
Despite the temporary setback, SAVE enrollees are benefitting from a $0 monthly payment during this period. While the legal challenges continue, it is important for borrowers to stay informed about their options and potential next steps. Keep following Extreme Investor Network for more updates and insights on personal finance matters.