This is Confusing!

We’re leveling with you here. This is a confusing and frustrating time to be figuring out what to do with your student loans, and in many cases there are no good answers right now. This is largely because of a combination of lawsuits that are currently moving through the courts challenging the Saving on a Valuable Education (SAVE) repayment plan, and rampant servicer mismanagement.

The SAVE litigation, in particular, has caused quite a bit of chaos. Because of this lawsuit, the SAVE plan is currently blocked. The U.S. Department of Education has taken down the applications for consolidation and the income-driven repayment plans from its website. Borrowers are still able to consolidate and apply for the SAVE Plan or the Income-Based Repayment (IBR) Plan using paper forms that must be mailed, faxed, or uploaded to submit. Borrowers who were enrolled in SAVE will still remain in an interest-free administrative forbearance, and borrowers who apply for SAVE will be placed on a processing forbearance while their application is reviewed, and then on the same non-interest-bearing forbearance once approved. This interest-free forbearance time does not count toward Public Service Loan Forgiveness cancellation nor Income-Driven Repayment cancellation. Borrowers in IBR will have their time count towards cancellation—however, they may pay significantly more. The situation will likely remain in limbo until the fate of the SAVE plan is decided by the courts.

We also know that borrowers have had problems accessing the forbearance; servicers have not been relaying this information correctly to borrowers, and at times, they haven’t been following the U.S. Department of Education’s guidance on the forbearances being issued. If this is the case for you, reach out to your servicer to try to get the issue resolved. If the issue is still happening after that, please file complaints.

Unfortunately, this is going to be a bit of a waiting game until the courts decide the outcome of the litigation. Here are some brief tips for managing the chaos right now:

Only use trusted sources to get information on your student loans
Stay vigilant
File complaints when you experience issues
Seek legal counsel if you are in need of more help