Student Loans in SAVE Forbearance? No, They’re Not Going Back Into Repayment

If you’re one of the nearly 4 million borrowers with student loans enrolled in the SAVE repayment plan , you may be concerned about when repayments will resume. But despite what you might be hearing from loan servicers, your loans aren’t going back into repayment anytime soon.

With ongoing litigation surrounding student loans, the process of resuming payments is significantly delayed. Until the case reaches the Supreme Court for a final ruling , there’s no need to panic. You’ll remain in SAVE forbearance much longer than the placeholder dates your loan servicer might have provided. Plus, your loans won’t be moved to another repayment plan without your consent.

What Is the SAVE Plan?

The Saving on a Valuable Education (SAVE) repayment plan is a newly revamped income-driven repayment (IDR) option introduced by the U.S. Department of Education to replace the REPAYE (Revised Pay As You Earn) plan. SAVE is designed to offer more favorable terms for borrowers. If you’re enrolled in the SAVE plan, your payments are based on a small percentage of your discretionary income—5% for undergraduate loans, compared to 10% (or more) under other IDR plans.

Additionally, SAVE includes important benefits like no accrual of unpaid interest, meaning that as long as you’re making your payments, your loan balance won’t grow due to interest charges. This is especially important for borrowers with low or no monthly payments due to their income levels. Plus, SAVE offers faster loan forgiveness for undergraduate loans, with many borrowers seeing forgiveness in as little as ten years for smaller balances.

The plan is specifically designed to ease the burden of student debt for millions of Americans. With over 4 million borrowers currently enrolled in the SAVE plan, it’s clear that this option is one of the most popular among income-driven repayment plans. Due to its favorable terms, it’s also likely to keep growing as more borrowers enter repayment.

Litigation and Its Impact on SAVE Forbearance

The delay in student loan repayments is tied to ongoing litigation, which has placed millions of borrowers in limbo. This legal battle stems from challenges to the Biden administration’s broader student loan forgiveness efforts, including plans to cancel significant portions of student loan debt for certain borrowers.

Before the full scope of the SAVE Plan could take effect, a coalition of six Republican-led states—Arkansas, Iowa, Kansas, Missouri, Nebraska, and South Carolina—filed a lawsuit, arguing that the Biden administration’s student loan forgiveness program exceeds the executive branch’s authority. These states claim the plan would negatively affect state-based entities, such as loan servicers, that manage federal loans. The 8th Circuit Court of Appeals granted an emergency stay, pausing the implementation of loan forgiveness, and the case is expected to be escalated to the Supreme Court for a final ruling.

Until this legal process is fully completed, millions of borrowers—particularly those enrolled in the SAVE plan—will remain in forbearance. Loan servicers have issued placeholder dates for repayments to resume, but these dates are largely speculative, as the Department of Education cannot resume repayments until the courts make a final decision.

Placeholder Dates from Loan Servicers

If you’ve been monitoring communication from your loan servicer, you may have noticed repayment dates listed as upcoming, often around October or November. These dates are confusing, but it’s essential to understand what they represent: placeholders. The loan servicers are legally required to provide a date when payments might resume, but these dates are based on general assumptions, not concrete timelines.

Due to the ongoing litigation in federal courts, particularly the case expected to go to the Supreme Court, these placeholder dates are unlikely to hold up. Repayments won’t begin until the legal battles are resolved, which could take well into 2025 or beyond.

Borrowers should treat these dates as tentative rather than firm. It’s crucial to stay informed, but rest assured that no immediate action is required on your part.

Can The Department of Education Change Your Repayment Plan?

One key concern for borrowers is whether they could be moved from the SAVE plan to a different repayment option without their consent. Fortunately, the Department of Education has strict guidelines in place to prevent this from happening. If you’ve signed up for the SAVE plan, you cannot be moved into a different repayment plan, such as Income-Based Repayment (IBR) or the 10-year Standard Plan, unless you actively choose to do so.

The Department of Education’s role is to uphold the integrity of the repayment plans you select, meaning you’re in control of your repayment future. This protection offers peace of mind during the ongoing legal battle, as you won’t be automatically placed in a more burdensome repayment plan unless you opt for it.

What to Do While Your Loans Are in SAVE Forbearance

While your student loans remain in forbearance under the SAVE plan, stay informed and be prepared, even though you won’t need to take any immediate action.

1. Stay Updated on the Litigation: Keep an eye on the case’s progress through reliable sources like the Department of Education or your loan servicer .
2. Prepare for Eventual Repayment: Start planning ahead by reviewing your finances and budgeting for future payments under either the SAVE plan or another IDR, depending on the outcome of the pending litigation.
3. Avoid Pressure from Loan Servicers: Don’t feel rushed into making payments or switching repayment plans prematurely.
4. Explore Your Options: If you want to switch to another plan like IBR, make sure to fully understand the pros and cons before making a decision.
5. Monitor Loan Servicer Communications: Review emails and notifications from your loan servicer, but don’t expect any change to your loan status until the courts have ruled.

Don’t Panic!

There’s no need to panic – yet.

Your loans aren’t going back into repayment anytime soon, and any dates loan servicers provide are simply placeholders. With ongoing litigation working through the courts, including the possibility of a Supreme Court decision, repayment timelines remain uncertain and likely far off.

In the meantime, focus on staying informed, planning ahead for eventual repayment, and knowing that you remain in control of your repayment plan choices.