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.
