Listen in with student debt experts and Board Member Drs. Tony Bartels and Rebecca Mears in this next installment of our Student Debt Series. In this episode we’re covering the latest news on the SAVE plan, the recent court rulings, what new grads should focus on now, and the best next steps based on the available student loan repayment plans.
As always, we want to hear from YOU. Please share your thoughts by sending an email or joining the conversation.
NOTE: This is an ongoing situation, for continued updates visit the VIN Foundation Blog and student debt message board areas.
GUEST BIOS:
Dr. Tony Bartels
Tony Bartels, DVM, MBA graduated in 2012 from the Colorado State University combined MBA/DVM program and is a VIN Foundation Board Member and Student Debt Expert, and an employee of the Veterinary Information Network (VIN). He and his wife, a small-animal internal medicine specialist practicing in Denver, have more than $400,000 in veterinary-school debt that they manage using federal income-driven repayment plans. By necessity (and now obsession), his professional activities include researching and speaking on veterinary-student debt, providing guidance to colleagues on loan-repayment strategies and contributing to VIN Foundation resources. Beyond debt, his professional interests include small- and exotic-animal practice. When he’s not staring holes into his colleagues’ student-loan data, Tony enjoys fly fishing, ice hockey, camping and exploring Colorado with his wife, Audra, daughter, Lucy, and their two rescued canines, Addi and Maggie.
Dr. Rebecca Mears
Rebecca Mears, DVM is from Lexington, KY, and a graduate of University of Georgia’s College of Veterinary Medicine. Rebecca started her career as an equine general practitioner and is an active AAEP member, currently serving as a member of the AAEP DEI Committee. Her interest in student debt education began with keeping her own education costs lower and grew from there. This was supported by her involvement in the Veterinary Business Management Association (VBMA), which she now gives back to as a National Advisor. In her time away from veterinary medicine, she can be found obsessing over plants and hosting impromptu dance parties. She is passionate about giving back to the profession and improving the lives of veterinarians, pre-vet and vet students.
LINKS AND INFORMATION:
VIN Foundation Student Debt Center
Check your current student loan servicers and other loan details — VIN Foundation My Student Loans tool
Student Loan Repayment Simulator
VIN Foundation GIVE page to support these programs & tools
VIN Foundation Blog, Related Student Debt Blog posts:
- SAVE is blocked. What does that mean for your student loans?
- 2024 Graduating Veterinarians: Special Student Loan Timing Considerations
- Choosing between PAYE and SAVE income-driven plans: Are you in The Pickle?
- A ‘new’ income-driven repayment plan?
Personalized student loan help from VIN and VIN Foundation
Income-Driven Repayment Plan Discretionary income calculations, WikiDebt
Federal Student Aid Data, Consolidation, and Repayment Applications
Department of Education Updates on Saving on a Valuable Education (SAVE Plan)
SAVE Plan Court Actions: Impact on Borrowers
SAVE Repayment Plan Offers Lower Monthly Loan Payments
Have a veterinary story you want to share?
Email VIN Foundation Student Debt Education
Get updates to stay tuned for the VIN Foundation webinars on student debt.
Have a story you would like to share on the podcast? Submit your story idea.
TRANSCRIPT
Intro
Tony Bartels, DVM, MBA: It’s a little bit of a double edged sword. So you’re looking at your current status and you’re like, well, I don’t want to be in a plan that’s not earning me forgiveness credit, let me switch to one that will give me forgiveness credit. If something happens down the road where SAVE is available or Pay As You Earn or RePAYE comes back, and you want to get back into those plans, that unpaid interest that you might have using the income based repayment options would get added to your principal when you switch away from it. I think that what that tells me is just deep breath, take a step back, look at your loans, what are they telling you, and don’t make any quick, rash decisions.
Jordan Benshea: That is student debt expert and VIN Foundation Board Member, Dr. Tony Bartels with Dr. Rebecca Mears, and this is the VIN Foundation’s Veterinary Pulse Podcast Special Student Debt Series. I’m Jordan Benshea, Executive Director of the VIN Foundation. Join me as I talk with veterinary colleagues about critical topics and share stories, stories that connect us as humans, as animals, as a veterinary community. This podcast is made possible by individuals like you who donate to the VIN Foundation. Thank you. Please check the episode notes for bios, links, and information mentioned. Welcome.
Latest Updates on the SAVE Plan
Jordan Benshea: We are once again back with our VIN Foundation student debt experts, Doctors Tony Bartels and Rebecca Mears, to talk about the latest with student loan repayments, and this time, in this episode, we are specifically focusing on the SAVE plan, as well as a few others, but really the latest news that’s been coming out with regards to that plan. So welcome, Tony and Becca.
Tony Bartels, DVM, MBA: It’s that time again.
Jordan Benshea: Again.
Tony Bartels, DVM, MBA: Again.
Rebecca Mears, DVM: Is it ever not that time?
Tony Bartels, DVM, MBA: You think it might like, yeah. We thought it might, you know, slow down a little bit, but apparently not.
Jordan Benshea: Apparently not. We’re back for this comedy show.
Tony Bartels, DVM, MBA: Yeah, tragic comedy.
Jordan Benshea: Yeah, it’s a major tragic comedy.
Challenges and Confusion with SAVE Plan
Jordan Benshea: So we were all very excited about the new SAVE plan when it was announced, and, unfortunately, that’s been a bit short lived because that excitement has been quelled on July 18, and then again with additional information on July 26th, so what’s the latest? Let’s dive right in, Tony, can you take us through the July 18th and then July 26th announcements?
Tony Bartels, DVM, MBA: Sure, so SAVE, and it’s still, there’s still a lot to be excited about, but there’s definitely some bumps in the road here. So SAVE is the Saving On A Valuable Education plan that replaces Revised Pay As You Earn. There have been a number of lawsuits challenging that plan, and some of them have resulted in the courts, most recently on the 18th, a federal appellate court blocking the Department of Education from operating the SAVE repayment plan in full. So all of the changes that were scheduled to take effect July 1st are pretty much on pause. So and those changes had taken effect, I mean, there are people that were in SAVE and receiving the benefits of SAVE. There were a new set of changes that were due to take effect July 1st, and as these lawsuits were working their way through the courts, this recent appellate court said “we’re just going to have to put this on pause until we can hear the rest of the arguments on both sides heard for the challenges to SAVE”, which means we kind of have to just, everything just gets put on hold. That, of course, you know, just like we saw with the pandemic forbearance benefits, there are side effects when you try to turn this huge federal student loan repayment system on and off like a light switch. So, right now, for anybody who is using SAVE, you don’t have to make any payments, you’re placed in an automatic forbearance and there’s no interest that accrues on that, but there may or may not be any forgiveness credit granted for that particular forbearance, and that’s fine. That’s okay for those that are in SAVE, I’ve been using SAVE, my wife is using SAVE, Becca I think you’re using SAVE.
Rebecca Mears, DVM: I am.
Tony Bartels, DVM, MBA: So I mean, it’s not a bad place to be. The problem becomes, for everybody who was applying for SAVE and may or may not have received confirmation that they were in SAVE or people who were planning on using SAVE. It’s created a lot of confusion for that particular group, and since we’re kind of in the midst of graduation season here, so we still have one veterinary school to graduate their class, Arizona, in the next coming weeks here. But most folks have graduated, and we’re kind of looking at what they should be doing with their student loans or had already submitted consolidation applications, and some of those things are kind of up in the air. So, that’s the part that’s really confusing, I would say right now in the short term.
Impact on Current and Future Borrowers
Jordan Benshea: Okay, and what does it mean for, like, what do these rulings mean for anyone that’s currently using SAVE right now, that is already enrolled such as yourself and your wife and Becca?
Tony Bartels, DVM, MBA: Yeah, for those of us that are in SAVE, so you’ve confirmed that SAVE is your repayment plan, no matter what your minimum monthly payment is, they’ve been turned off, mostly for July. July’s payments were turned off because they were recalculating them as a result of those final rules that were supposed to be implemented. So July month still counts towards forgiveness. August because we’re not sure what the future holds for SAVE, those payments are on pause, and there’s no interest accruing. No payment is due for at least August, but no forgiveness credit is also granted for August, pending whatever the resolution is to these court cases for SAVE.
Jordan Benshea: Okay, and what does it mean for anyone who wants to apply or has been considering applying for an income driven repayment plan?
Tony Bartels, DVM, MBA: Yeah, that’s where you really have to confirm what your status is for your particular loans, and we’ve seen a lot of these questions pop up already on the Student Debt Message Boards. People who have submitted consolidation applications, maybe even months ago and their consolidation has been processed, but they applied for SAVE as part of their consolidation and they’ve either been put into a different repayment plan, maybe a standard consolidation plan, or they’re not sure what status their repayment is in.
Checking Your Repayment Plan Status
Tony Bartels, DVM, MBA: So I would recommend that everybody check a new student aid data file, grab that from studentaid.gov, download your student aid data file, and upload it into the VIN Foundation My Student Loans tool, and check and see what your repayment plan is showing. You should look at, you know, what your servicer is also showing you as your repayment plan. Maybe you’ll even see that repayment plan information while you’re logged into studentaid.gov, but I always want to check what that student aid data file shows most recently, even if you checked a month ago, you want to check again just because there’s been so many changes. I want to see, you know, what my file shows and then compare that against what my loan servicer is showing me, as well as what is also being displayed in that studentaid.gov portal.
Jordan Benshea: Double checking that information. Go for it, Becca.
Rebecca Mears, DVM: I was going to say I’m nodding and smiling along here because, Tony, you took the words right out of my mouth. I mean, even if you have checked that earlier this year, what your repayment plan was, your servicer information, it takes a couple of minutes to go and check that information again. Just where, you know, we have been trying to turn on and off this gigantic student loan repayment beast, it’s always a good idea just to check and make sure that information matches what you believe it to be. So grab that student aid data file and upload it and just double check that information, is a great recommendation.
Tony Bartels, DVM, MBA: And if you find that your loans are not in SAVE and you may have a payment due. So the only folks that are actually officially in SAVE will have their loans in forbearance for August. If your loans are not in SAVE, your loan servicer may be expecting you to make a payment in August, so you’re going to want to see what is that minimum monthly payment and what repayment plan is it for. Then you can decide, do I need to call and request a forbearance, then maybe apply for a different plan, maybe even apply for SAVE. But the first step is to check which repayment plan you’re in and whether or not you have a payment due for the month of August.
PAYE and ICR Repayment Plans
Jordan Benshea: Okay, and where do things stand as of now for PAYE and ICR?
Tony Bartels, DVM, MBA: Yeah, that’s where it gets a little bit fuzzier. So, when this July 18th ruling was first handed down, the Department of Education was saying, you know, no new applicants would be allowed in SAVE, and I guess that made sense, and we were already past the phase out deadlines for Pay As You Earn and ICR repayment plans, which were July 1st. But then on July 26, the Department of Education updated some of their guidance to incorporate some frequently asked questions, and in that, they said you can still apply for Pay As You Earn or ICR, pending the outcome of this litigation around SAVE. So that implies that, you know, potentially Pay As You Earn and ICR are kind of back on the table, that the phase out is, I mean, the phase out was really part of the overall rolling out of SAVE. So it stands to reason that if SAVE is going to go away, that we would go back to some of the rules that predated SAVE, which means Pay As You Earn and ICR would be viable repayment options. But it’s just a little bit confusing since we went through this whole phase out period where you had to apply for either PAYE or SAVE or ICR before that July 1st phase out, and now it sounds like you might be able to apply for them again. Although, you have to be a little bit cautious because in the same statement where they said you can apply for PAYE, ICR, or SAVE, they also said that the loan servicers are pausing the processing of any applications.
Jordan Benshea: That was going to be my next question.
Application Process and Uncertainties
Jordan Benshea: There’s been a lot of news around the applications. So we heard that you couldn’t apply anymore and then that you could. So where do things stand with the application process?
Tony Bartels, DVM, MBA: Oh, yeah, that’s great. That’s the million dollar question. So you can apply all you want, but whether or not they’re going to actually do anything with that is another story. And you also cannot apply electronically. So, you can’t apply via studentaid.gov, which is the easiest way to do this.
Navigating the New Loan Application Process
Tony Bartels, DVM, MBA: You have to actually submit a IDR plan request. Either print it out, fill it out, and mail it in, or you could fill it out as a PDF and email it to your loan servicers. So, as part of the court ruling, the Department of Education took down the electronic methods for applying for income driven plans or even consolidating your loans. So, that impacts a lot of particularly recent graduates who we talk to about consolidating your loans during your grace period. You can still do those things, it’s just more complicated. You have to either fill out that PDF and submit it to your loan servicers or you have to actually print it out and mail it.
Jordan Benshea: That almost seems as though they’re setting you up not to succeed because the idea that you’re going to print something out and then mail it, and like, is that going to get there? Or your email, it just seems that they’ve just made that process so much harder, not only for borrowers, but also for themselves down the line.
Tony Bartels, DVM, MBA: Yeah, no doubt.
Handling the Backlog and Ensuring Receipt
Tony Bartels, DVM, MBA: I mean, this is going to create a huge backlog. So not only is it a little bit already kind of a backlog for those that have submitted applications prior to this court ruling, but anybody that submits one during this period is just going to kind of add to the congestion. So it’s going to take a while to play out. So you’re going to have to have some patience, but if you are going to submit anything, especially via post mail, send it certified mail, so you know where it is, when it was received, who received it. You need to create that paper trail to be able to confirm what you sent, when you sent it, and who received it. I would do the same thing if you email it, so if you email a PDF to your loan servicer, make sure you confirm receipt on the other end of that information. Whether you have to call and make sure that they can acknowledge that it was received, or you can send it, you know, some kind of return or read receipt via your email, something that confirms that that is received on the other end, so you know that it didn’t end up just in some black hole.
Jordan Benshea: This is not the type of thing you want to just slap a stamp on and put it in the mailbox and cross your fingers.
Tony Bartels, DVM, MBA: Yeah, but that said, you know, even if you send it, things could change between now and when they process it.
Jordan Benshea: Receive it, let alone process it.
Tony Bartels, DVM, MBA: So it’s going to be that you’re going to have to have some patience there, and that’s why if it does make sense for you to either apply for SAVE again, or apply for Pay As You Earn because it’s another option you have available and it’s back on the table, you’re probably going to have to request a forbearance to while they process it because it could be weeks, months before that actually happens.
Important Changes for Borrowers
Jordan Benshea: So what are the other important changes that borrowers need to know now?
Tony Bartels, DVM, MBA: Well, so some logistical considerations, I think there’s certainly, for the people that are kind of stuck in that, I submitted an application and I don’t know where my loans stand, or people that are thinking about selecting a different income driven repayment plan, you have to be careful about which ones you pursue. So while SAVE is questionable, and Pay As You Earn and ICR are also questionable, depending on how the court rules on SAVE, the IBR plans are still out there available and not questionable in any way, shape, or form currently. So, you might be tempted to apply for IBR, one of the income based repayment plans, however, the IBR Plans can capitalize your interest if you switch out of them. So, It’s a little bit of a double edged sword. So you’re looking at your current status and you’re like, well, I don’t want to be in a plan that’s not earning me forgiveness credit, let me switch to one that will give me forgiveness credit. If something happens down the road where SAVE is available or Pay As You Earn or RePAYE comes back, and you want to get back into those plans, that unpaid interest that you might have using the income based repayment options would get added to your principal when you switch away from it.
Choosing the Right Repayment Plan
Tony Bartels, DVM, MBA: I think that what that tells me is just deep breath, take a step back, look at your loans, what are they telling you, and don’t make any quick, rash decisions until we know more about the future of particularly SAVE and what that’s going to mean for the rest of the income driven plans that are out there.
Rebecca Mears, DVM: Yeah, and that’s hard to do, like, this is very confusing. This feels very topsy-turvy, and I know I’ve seen questions on all corners of the Internet and on the Student Debt Message Boards on VIN Foundation as well about, like, what does this all mean for student loan forgiveness and SAVE? But I really do think taking that deep breath and sort of looking at what are your options right now is really important. My question, Tony, was would there be any use case scenarios where you see someone needing to run and make changes?
Who Needs to Act Quickly?
Rebecca Mears, DVM: You know, we’re telling everybody to kind of take a deep breath, but anyone that would fall into that category of should do something at this time?
Tony Bartels, DVM, MBA: The only one I think needs to run and make changes is somebody who might have had their loans consolidated, but their repayment plan now results in a monthly payment that is way higher than they were anticipating or expecting. So those folks, I would call and reach out to request a forbearance. Now it probably won’t be the interest free one, but it will give you an opportunity to look at your loans, what repayment status are they in, and decide which repayment option you want to apply for next. That would be the only case where I would say you probably need to act a little bit more quickly because you’re probably going to have a payment due in August here, and if you want to get ahead of that, then you might have to request that forbearance sooner rather than later. So but anybody else, there really isn’t any reason I can see that you need to run to submit a different income driven repayment application because they’re just going to sit on it anyway.
Advice for New Graduates
Tony Bartels, DVM, MBA: So, I would ask more questions before you submit an income driven repayment application, it still may make sense for you to consolidate your loans if you’re a new grad and in your grace period. I’m not really sure how that’s going to fall in terms of the things that they process and the things they don’t process. They’re going to be sitting on a lot of different applications, maybe they’ll process those consolidation applications still, maybe they won’t, or maybe they’re going to take a little bit longer. So that’s probably the group I think is going to be most affected by this, is the new grads who are in their grace period. You may not see a benefit to consolidating your loans as soon as you can after you graduate, now if you’ve already done that, then great. That should be in the system and hopefully happen, but it’s a little bit harder, we have to kind of weigh the pros and cons of actually submitting that application now, and the likelihood that it’ll actually get processed by the time your grace period ends. So you may just want to wait on that, if you can afford to do so.
Staying Updated and Seeking Help
Jordan Benshea: So where can colleagues go for updates on the latest information? Obviously, this podcast, and then we do a blog post, where else would you suggest, Tony?
Tony Bartels, DVM, MBA: Yeah, you’re going to need to check the studentaid.gov website frequently, they make changes to that and they do it kind of haphazardly. They don’t always make it obvious that something new is on there, so it’s just worth taking a peek at it. But, you know, we’re trying to catch that information too and make sure that we post it on the VIN Foundation blog that we have covering the court rulings. I would also encourage you to reach out and either post in the message board discussions you already have started for your student loans or create new ones, so we can walk through some of the questions that you have. It’s hard for us to envision all of the different logistical possibilities that are out there, but we’ve already seen some pretty interesting ones pop up on the message board. So I would really encourage you to just kind of review your student loans, digest it a little bit, and then post the questions that you have surrounding your circumstances, and we’ll kind of walk through the pros and cons of your available options.
Jordan Benshea: Yeah, the Student Debt Message Boards are a great place to go where not only can you ask questions about your own loans, but you can also just learn a lot. A lot of people may feel that their loan situation’s very unique and individualized specifically to them, which it very well may be, but there is also a huge wealth of information in those message boards. We really encourage you to explore those because there’s a lot that you can learn from similar situations and perhaps even things that you haven’t thought about with regards to your own.
Final Thoughts and Encouragement
Jordan Benshea: Tony and Becca, anything else that you think our listeners need to know about this latest news?
Tony Bartels, DVM, MBA: Yeah, I would just say I know it seems really confusing and really uncertain, but kind of like we saw with the pandemic forbearance benefits, it’s kind of a perfect model. There was a lot of confusion, but then the further away we got from the initial confusing aspects, the more clarity we had around what was going to happen next. So I think that same thing will happen here, whether or not SAVE survives, you know, is it’ll be great if it does. If it doesn’t, there’s still going to be a whole host of other income driven options that are still available for you to use. So conceptually, things are still generally the same, it’s just difficult to see exactly what the long term strategy looks like until we have a little bit more clarity on whether or not SAVE is staying or going. So, I would just, you know again, take a deep breath, really get familiar with your student loans, and ask questions on anything that you’re seeing.
Rebecca Mears, DVM: Yeah, agreed on that one, and if it makes anybody feel any better, I’m stuck right there with you in all of this SAVE mess, Tony and his spouse the same. I’m not making any changes, I’ve gone, grabbed my student aid data file, uploaded it to the VIN Foundation My Student Loans tool to verify that I’m seeing the same information there that I’m seeing on my loan servicers website, and I’m just waiting to get more information. We’ll make the best decisions that we can make for our student loan repayment strategies on the current information and then sort of go from there, but right now, we’re just kind of waiting to hear more and benefiting from this interest free forbearance as it is.
Tony Bartels, DVM, MBA: Yeah, using it as an opportunity to boost some of those other more critical areas of your financial wellness. So if you need to boost your emergency fund or increase your retirement savings or work towards a down payment on a home or buying a practice, all those things are still relevant and important, and you’ll have a little more cash flow flexibility, if you’re in SAVE and can benefit from that forbearance, that interest free forbearance.
Outro
Jordan Benshea: Thank you both so much. As always, it’s very informative and hopefully helpful to our listeners as we hear, and everything that we’ve talked about, as usual, will be in the episode notes. We’ll put links in there. Thanks so much, Tony and Becca. We appreciate your time.
Tony Bartels, DVM, MBA: Thank you.
Rebecca Mears, DVM: Thanks, Jordan.
Jordan Benshea: Thank you for joining us for this episode of the Veterinary Pulse. Please check the episode notes for additional information referenced in the podcast. If you enjoyed this podcast, please follow, subscribe, and share a review. We welcome feedback and hope you will tune in again. You can find out more about the VIN Foundation through our website, VINFoundation.org, and our social media channels. Thank you for being here. Be well.
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