Overview
- The Education Department said it will not use the SAVE plan’s lower payment formula for PSLF buyback calculations on deferments or forbearances dated July 1, 2024 or later, which raises many borrowers’ bills.
- The SAVE income-driven plan, blocked by a federal appeals court in March, had set payments as low as 5% of discretionary income, so losing it means higher buyback quotes for some public workers.
- Starting July 1, new borrowers and those who consolidate will find the Repayment Assistance Plan is the only income-driven option, and it requires 30 years of payments before any remaining balance can be forgiven.
- Borrowers who do not choose a plan may be placed into the standard schedule with higher monthly payments, so loan experts urge people to pick an affordable option now.
- Backlogs remain heavy, with more than 88,000 PSLF buyback applications awaiting decisions, and advocates warn the higher quotes could put relief out of reach for some.