The long-awaited national election results are nearly all tallied, and we know one thing for sure: changes will be coming to student loan repayment.
Changes were due to occur no matter the election outcome with the fate of at least one repayment plan and certain student loan forgiveness options tied up in the courts. With full Republican control of the executive and legislative branches likely this January, we may see a shift in the types of student loans and repayment options available going forward.
What does that mean for your student loans and repayment options?
Nothing…yet.
What is the status of federal income-driven student loan repayment?
As a quick federal student loan repayment recap, the U.S. has been running income-driven student loan repayment plans since 1994 when the Income-Contingent Repayment (ICR) plan was created by the Department of Education (ED) under the authority granted by the Higher Education Act (Student Loan Reform Act of 1993). Since then, we have seen several different Income-Driven Repayment (IDR) options become available: Income-Based Repayment (IBR) along with Public Service Loan Forgiveness (PSLF) was created by law in 2007 (College Cost Reduction Act). IBR was first made available to borrowers in 2009, yet qualifying PSLF payments began in October 2007.
In 2010, the Higher Education Act was amended to update IBR for new borrowers receiving loans after July 1, 2014. In the interim, Pay As You Earn (PAYE) was created in 2012 by ED using the same regulatory process to create ICR. Revised PAYE (REPAYE) was similarly created in 2015. REPAYE was updated in 2023 by ED and renamed Saving On A Valuable Education (SAVE). As part of the SAVE rollout, PAYE and ICR were phased out on July 1, 2024.
A lawsuit filed by several states blocked the SAVE plan in July 2024 and prevented ED from enrolling additional borrowers in SAVE. Current borrowers enrolled in SAVE have been placed into an interest-free general forbearance with no payments due or forgiveness credit earned. The recent court rulings also questioned whether or not forgiveness can be granted under any of the IDR plans created by ED (ICR, PAYE, REPAYE, SAVE).
In the interim, ED has moved to temporarily reopen the ICR and PAYE programs.
Listen to the recent Veterinary Pulse Podcast on Student Loan Repayment:
Income-Driven Repayment Plan Uncertainty
Regardless of the recent national election outcome, there was going to be student loan repayment plan uncertainty. Those enrolled in ICR, PAYE, REPAYE, or SAVE do not know if their strategy will lead to student loan forgiveness and those in SAVE still do not know when they will have another payment due. This will persist until we have a court ruling on the legality of SAVE and the other forgiveness plans created by ED.
The recent election results, however, offer some insights into where things could head next.
While previous Democratic and Republican administrations have favored forgiveness-eligible repayment options over the last 25 years, more recent Republican proposals and statements do not. We will likely see a shift from forgiveness-based repayment options to something else. What that is, who will be eligible, and what happens to existing options remains to be seen. Until the incoming administration takes over and presents its path forward and until the courts rule, it will be difficult to build a student loan repayment strategy that is best for you.
What should you do now? It depends…
I was using SAVE before the court blocked it:
Sit tight at least until we see a ruling from the court. Anyone using SAVE before the court blocked it has been put into a general forbearance. No interest, payments, or forgiveness credit is granted during this forbearance period. On October 31, 2024, ED said that the SAVE general forbearance could last for 6 or more months. Even though you are not earning forgiveness credit, having payments and interest turned off is the most favorable place for your loans to be. Income recertification is not required while in the SAVE general forbearance.
I am using PAYE, ICR, or IBR now:
Keep making your minimum monthly payments, ideally using the autopayment feature to receive an interest rate discount.
Check your income recertification (aka Anniversary Date) to see when you are next due to update your income information. Recertification for any income-driven repayment (IDR) plan is paused until February 2025. For anyone with an IDR Anniversary Date before February 2025, you can add one year to it. Check your loan servicer account and your federal student aid data file in the VIN Foundation My Student Loans tool to confirm if your Anniversary Date is before February 2025, or later.
Updated income documentation is due at least 35 days before your Anniversary Date. Failure to provide updated income information can result in a much higher minimum payment for your student loans.
No one in the SAVE general forbearance needs to renew their income information until a court rules on the SAVE litigation.
My income has decreased. How do I get my income-driven minimum payment to decrease?
Apply to have your payment recalculated under your current plan or switch to a more beneficial plan. Whether you are due to recertify or not, if you can get a lower minimum monthly payment than you have now because your income decreased or if your family size increased, then you can submit to have your payment recalculated immediately. Use the “Manage Your Income-Driven Repayment Plan” option here: https://studentaid.gov/idr/
You can submit to have your payment recalculated under any IDR plan you’re currently using. If you would like to switch plans, the only IDR options available right now are IBR and SAVE.
You can apply for SAVE but you will not get in until the litigation resolves. When you apply for SAVE, your loans will be placed into a 60-day processing forbearance, followed by an eligible interest-free general forbearance.
ED recently moved to temporarily reopen ICR and PAYE later this fall, possibly around mid-December.
I am not currently using an income-driven repayment plan but I would like to. How do I apply?
First, check your IDR eligibilty using the VIN Foundation My Student Loans tool. Your IDR profile will help you determine which repayment option is best for you.
You can apply for an income-driven repayment plan using the “Apply for an Income-Driven Repayment Plan” option here: https://studentaid.gov/idr/
The only two options available right now are IBR and SAVE. According to the Department of Education, they are planning to reopen the PAYE and ICR plans this fall.
ED recently moved to temporarily reopen ICR and PAYE later this fall, possibly around mid-December. You might wait until those additional options are available to select an IDR.
I’m a new graduate. Should I consolidate? How do I get my loans into repayment and what plan should I choose?
The 2024 graduating class has a challenging start to repayment given the timing of all the recent changes. Using a federal Direct Consolidation Loan is helpful if you have federal student loan types other than Direct Loans (Federal Family Education Loans, Health Professions Student Loans, Loans for Disadvantaged Students, or Perkins Loans). A consolidation loan can also help you end your grace period early and get your loans into an IDR plan or into the SAVE general forbearance sooner.
If you’re approaching the end of your post-graduation grace period now, then there is no benefit to consolidating unless you have those other loan federal loan types mentioned above. Apply for the SAVE plan. Your loans will enter a 60-day processing forbearance. After the processing forbearance expires, request the SAVE general forbearance so interest will stop accruing on your loans and no payment will be due until there is a more clear course of action for student loan repayment. No matter what repayment strategy you pursue long-term, the SAVE general forbearance will buy you some time to jump-start your post-graduation financial wellness, stop your interest from accruing, and find the best long-term repayment strategy for you.
I’m hoping for PSLF. How do I earn credit?
You can still earn PSLF credit as long as you’re in an IDR other than SAVE (ICR, PAYE, IBR), and otherwise meet the loan and employment requirements. Check your PSLF count using the VIN Foundation My Student Loans tool (PSLF Status tab). If you think you have earned more credit than you see posted, submit a PSLF employment certification form.
If you are using SAVE, you stopped earning PSLF credit in July 2024. If you are close to reaching PSLF, consider switching to another IDR plan to continue earning PSLF credit. Right now, IBR is the only other plan you can apply for.
If you do not see yourself moving away from a qualifying PSLF employer, stick with SAVE until there is a clearer path forward for earning PSLF credit.
ED recently moved to temporarily reopen ICR and PAYE later this fall (around mid-December). Consider switching then, particularly if you are eligible for PAYE to continue logging PSLF credit.
Where can I find my one-time forgiveness payment count adjustment?
According to ED, the automatic payment count adjustments are due to be completed in 2024. There is currently no official way to check your count adjustment yet. However, there is a non-official way to see the data ED currently has for you.
- Step 1) Log in to studentaid.gov
- Step 2) Open a new browser tab and go to https://studentaid.gov/app/api/nslds/payment-counter/summary
Caution: The data is going to look really ugly as it is not formatted well for viewing. Focus on reviewing the line items that show data for the repayment plan you are currently using and for loans that have a balance greater than zero.
If your count is not yet available or is lower than you were expecting, submit a request to the Federal Student Loan Ombudsman office for a manual count adjustment.
You can learn more about the IDR Account Adjustment at StudentAid.gov/announcements-events/idr-account-adjustment
I’m tired of IDR and the forgiveness back and forth. How can I be done with my student loans?
Understandable. The frequent changes and repayment uncertainty are enough to make anyone’s head spin. Set your desired timeframe to eliminate your balance and calculate the required monthly payment to get you there. Adjust your payment as needed to fit your budget and overall financial goals. But don’t do so at the expense of your overall financial wellness. First achieve the following: a working budget, a robust emergency fund (equal to at least 3-6 months of your expenses), maximize your available tax-advantaged long-term savings, and any health savings account (HSA). Depending on your goals, consider dedicated funds for a home down payment, practice ownership, or other opportunities.
Expert tip: If you are accelerating your student loan repayment, use the SAVE general forbearance for as long as it lasts. With no payment due and no interest accruing, you have the flexibility to pay the highest interest rate loan balances first, helping you eliminate your balance faster at a lower cost. Readjust once the SAVE forbearance is over.
Lost? Confused? We're Here to Help!
No matter where you fall during this period of extreme uncertainty in student loan repayment, make sure to keep excellent records (screenshots, printouts, confirmations) of any applications you submit and confirm receipt by your loan servicer(s).
Follow your application(s) closely and look for anything unexpected. Since the applications are going to take a long time to process, if you have payments that are due during that timeframe, you may need to request a forbearance pending the completion of your application.
Document all calls and communications with your loan servicers with names, dates, and the topics covered. Request a full history of your loan repayment and account history from your loan servicer, especially if you have questions about your account(s) or loan balance. Never assume that what you are told is what actually happens with your loans. You can verify by checking studentaid.gov and frequently reviewing new student aid data files in the VIN Foundation My Student Loans tool.
Right now, student loan repayment is quite chaotic. It will get better, hopefully, sooner rather than later. There are ways to navigate the chaos, but it will take a bit longer and could be a bit more frustrating than usual for a little while longer.
For many of you, working through these IDR issues will serve you best in the short and long term.
If you’re confused (it’s hard not to be right now), ask questions. And ignoring your student loans is never a good strategy.
You can ask questions on the student debt message board or submit a Student Debt & Income “Signalment” form and we’ll create a new anonymous post to review your loans with you.
If you need student debt help, reach out to VIN and VIN Foundation. We have free online tools like the VIN Foundation Student Debt Center and special message board areas to help you make sense of your options. If you have questions on any of the available tools and options, reach out to studentdebt@vinfoundation.org.
Dr. Tony Bartels graduated in 2012 from the Colorado State University combined MBA/DVM program and is an employee of the Veterinary Information Network (VIN) and a VIN Foundation Board member. He and his wife 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 initiatives.
11 thoughts on “The election is over. Change is on the horizon. What is next for your student loans?”
Have applied for IDR but server did not put in an administrative forebeafance. This creates huge burden for me. My husband has Parkinson’s. His doctor doesn’t think my husband should drive. Being unable to drive is just one symptom he experiences. I am on SSI and 67. My server (Nelnet) told me to make payments— like I have the money to do so I would do so. What are my options as they say I don’t qualify for a Forebearance?
Hi Becky,
Thanks for posting. I’m sorry to hear about your husband’s Parkinson’s. Did you loan servicer (Nelnet) tell you why you are not eligible for a forbearance? If your remaining student loans are federal Direct Loans, then you can apply for the SAVE repayment plan. Since the SAVE plan is blocked pending litigation, your servicer will place your loans into a “processing forbearance.” During the processing forbearance, no payment will be due but interest will accrue. The processing forbearance will last for a maximum of 60 days. When you reach 60 days, you can request a “general forbearance.” During the general forbearance, no interest will accrue and no payments will be due until the we get more clarity on what happens next with the SAVE plan. That should buy you some time to see which other repayment options could work best for you down the road. Hope that helps! Good luck 🙂
I have a question. I am currently in the SAVE plan. I have two Consolidation Loans that are serviced by EDFinancial. The first loans it the unsub and the second it the subsidized. I FINALLY got a response back from the Federal Student Aid Service Center about my specific situation. They confirmed what I knew all along. I am at 306 payment for both of my loans. This is a big deal for me, because I owe over $325K.
In their response to me they said exactly what you said in this article:
“As of 11/27/2024, you show to have made 306 of the required 300 monthly payments towards Income Driven Repayment Plan forgiveness…Yes, your forgiveness is being affected by the Saving on a Valuable Education (SAVE) Plan court injunction. Forgiveness as a feature of any IDR plan created by the Department is currently enjoined. That includes the SAVE (formerly REPAYE), PAYE, and ICR repayment plans. Borrowers who reach their plan’s repayment milestone—that is, 25 years in repayment for borrowers on any of these plans or 20 years for borrowers in PAYE or undergraduate-only borrowers in SAVE—will be moved into an interest-free forbearance, if they are not already in a forbearance as a result of the litigation. The Department can and will still process loan forgiveness for the Income-Based Repayment (IBR) repayment plans, which were separately enacted by Congress. You will be notified by your servicer, DEPT OF ED/EDFINANCIAL, when your loans are forgiven.”
So my question is very simple. I am eligible for the IBR plan currently based on my income. Can I just apply for IBR so I can be moved from SAVE to IBR and then they could forgive my loans because IBr was created by Congress? It seems simple but they didn’t suggest or mention it. Maybe they can’t. Any help ASAP would be very much appreciated.
Hi Chris,
Thank you for your comment.
That’s great you have reached the 300 monthly qualifying payments to receive student loan forgiveness! Before you do anything, I would first verify what your loan servicer has told you. As we talk about in the blog, make sure to check your forgiveness payment count: Step 1) Log in to studentaid.gov;
Step 2) Open a new browser tab and go to https://studentaid.gov/app/api/nslds/payment-counter/summary.
After you verify 306 qualifying payments for SAVE and IBR, then you will be eligible for forgiveness after you get your loans into a forgiveness-eligible plan. SAVE is not forgiveness-eligible right now because of the ongoing litigation. But as you were told, IBR was created differently by Congress and is still eligible for forgiveness. I have no idea why they wouldn’t recommend switching to IBR for your situation. But I’m also not surprised. Theoretically, after you switch to IBR, you should see your remaining loan balance forgiven. Follow your IBR application closely. It may take a while for your application to process with the reopening of ICR and PAYE and the backlog of other applications and income recertifications going on behind the scenes. Once you confirm your loans are in IBR, then start nudging your loan servicers and the Dept of Education to process your IBR student loan forgiveness. You’ll want that balance to be forgiven before the end of 2025 so you don’t have to pay federal income tax on the amount forgiven. There is a tax exemption on student loans forgiven between 2021-2025 tax years.
Be aware that if they do not process your IBR forgiveness for some reason, and you need to switch out of IBR to another plan in the future, you could see your unpaid interest capitalized (added to your principal). That said, you shouldn’t have much unpaid interest accruing since your loans should either be forgiven or placed into that interest-free forbearance for those who have reached their forgiveness milestone and are awaiting forgiveness.
Good luck! Please reply and let us know how it goes 🙂
From what I understand, if a borrower has made the required number of qualifying payments under IBR, then that borrower is eligible for forgiveness, regardless of the payment plan that is currently used by the borrower. If it is true that forgiveness takes place “after you get your loans into a forgiveness-eligible plan”, could you provide a link that confirms that this is the case?
Thank you!
Hi Alan,
Thanks for the follow-up post!
As with anything in the federal income-driven repayment landscape, the devil is in the details. You have to be very careful with the terminology you use with income-driven repayment and ensure you’re following along with the ongoing developments.
Unpacking your comment — Yes, if a borrower has made the required number of qualifying payments using the income-based repayment (IBR) plan, then the borrower is eligible for forgiveness.
Right now, you can’t say “regardless of the payment plan currently used…” because forgiveness as a feature of some income-driven plans is blocked by the same litigation holding up SAVE. That includes forgiveness for ICR, PAYE, and SAVE (formerly known as REPAYE).
Here are two links you can review that cover that:
– https://vinfoundation.org/paye-and-icr-income-driven-repayment-plans-temporarily-reactivated/
– https://www.ed.gov/higher-education/manage-your-loans/save-plan
Here’s the really confusing part: You can still earn forgiveness credit using ICR and PAYE, but you can’t be granted IDR forgiveness under the current court order blocking SAVE. So if you have made the required number of forgiveness-eligible payments using ICR, PAYE, or SAVE and you’re still in one of those plans, the only way you could receive forgiveness right now would be to switch to IBR (if you can) and seek your IDR forgiveness.
Receiving PSLF is not blocked by this court order. If you are at 120 qualifying PSLF payments and are using PAYE or ICR, you can still receive PSLF.
Clear as mud? 🙂
Hello there..
I have a similar question as Chris Tanner. I appreciate very much this information on how to see an actual tally of payment progress for IDR as the loan servicer (currently MOHELA) continues to render their standard “we can’t tell you that. We don’t have that information” as Student Aid.gov have verbally advised me of such but say to get a written copy as proof of their verbal I have to ask the servicer. I have been so frustrated with this!
So what I am seeing when I do what you advise is that under my current SAVE plan I have in excess (ie 329 qualifying payments) and only need 300. And under IBR if I were to switch the tally is 299 qualifying payments. I’m terrified to switch, however, feeling in fear of this not being accurate or everything being zero’d out to square one of payments counting as qualifying under a new plan. Additionally, I’m fearful to remain in SAVE as I have been advised by both MOHELA and Student aid people to do. My fear is that my qualifying payments will decrease under SAVE once litigation is resolved because I got credit for when my loans were in certain forbearance (based on economic hardship). Is that a possibility you think? What do you think is my best course of action at this point. I should also note that I had my undergrad loans forgiven in one fell swoop but my grad loans of $166,000 remain.
One more question: on that summary tally page that is quite difficult to make sense of, what does a letter “U” next to a particular plan indicate? For instance my summary lists all plans twice. At the top it either says I’m eligible or not for a particular plan by indicating either “Y” or “N” but it lists all the plans a second time beneath and indicates a “U” next to all. Fearful this means “undecided” due to pending litigation.
Thanks for all your help!
Hi Diana,
Thanks for posting! A few suggestions for you —
1) Switching plans (like moving from SAVE to IBR) does NOT reset your forgiveness clock. I’m also not sure why your SAVE and IBR counts would be different without being able to see your loan details. Unfortunately, you will not be able to receive student loan forgiveness for any of your remaining loans that are in SAVE while the litigation is ongoing. Since it sounds like you only have need one more payment to reach IBR forgiveness, it could make sense for you to switch to IBR (if your income and family size allows). Forgiveness still is available to those using IBR.
2) Until the court issues a ruling on SAVE, it’s impossible to say what might or might not happen with that plan.
3) I’m not sure what a “U” means for a particular plan. I’ve only seen “Y” and “N” next to the plan names. I have also seen errors in the plan eligibility determinations. It could be that your count adjustment is not yet finalized.
Glad to hear you had your undergrad loans forgiven! Keep pestering those loan servicers and the Dept of ED…it sounds like you’re very close to reaching forgiveness. Good luck 🙂
Hi Diana,
I’m back 🙂 I’ve seen a few forgiveness counts with “U” in them since you posted. Best I can tell, those are loans in your history that no longer have a balance. They may have either been replaced by a consolidation loan or loans you may have paid in full. I wouldn’t worry about those too much 🙂
Hi!
I am currently on the Save plan which is fine. But I was two months away from having my loans forgiven under PSLF. I sent in my form again and asked to buy back two months but have heard crickets. I don’t want to switch to any other plan tho because I also have 50k that is two years out from forgiveness. I got an email today basically dangling the PSLF credit to switch to any other plan but the save plan. I don’t understand it and I don’t know what to do. They keep not answering my buy back request, should I send it in again?
Hi Ali,
Thanks for posting a comment. The first thing I would do is check your forgiveness progress in your studenaid.gov account. There is a new widget released just this week that shows all of the forgiveness counts each of your loans should have. You should also see a PSLF progress tracker there too. Keep records of what you’re seeing in there.
Unfortunately, you won’t get PSLF or IDR credit for your loans while they are in the SAVE forbearance. I’m also not encouraged that the PSLF buyback will work for you in this situation. If you’re eligible for PAYE, that would be your next best plan to get to PSLF. Otherwise, you may need to wait until the SAVE litigation resolves, and we don’t know when that will be. Good luck! 🙂