SAVE Drama, Policy Hints & More: Thanksgiving Edition

We know it’s Thanksgiving week, so we’ll keep this update as short and sweet as pumpkin pie (though we can’t promise it’ll be as satisfying).

SAVE Plan Drama: What’s Next?

If you’ve been following our updates, you know the SAVE repayment plan remains tied up in court. While we don’t expect it to survive the legal process, there’s a silver lining: PAYE (and ICR) will soon be available again, providing some familiar options.

Whether REPAYE will return is still unclear, but it’s worth noting that it was created in 2015 and available throughout Trump’s previous administration. If the courts block SAVE, we hope  it will simply revert back to REPAYE.

Should You Switch Plans?

For now, the SAVE forbearance may still be the best option for many borrowers, but there are two scenarios where switching plans could make sense:
1️⃣ If you’re uneasy about the current forbearance not counting toward PSLF and prefer to resume qualifying payments.
2️⃣ If you plan to file taxes Married Filing Separately for 2024 to lower your payments. Assuming SAVE is blocked for good, REPAYE doesn’t allow this, so switching to PAYE or IBR might be strategically better.

📣 What’s Ahead for Student Loan Policy under Trump?

We might be starting to see what the next four years of student loan policy could look like. Last week, a GOP leader introduced the Affordable Loans for Students Act. Key takeaways include:

💡 Reducing federal loan interest rates to 1%—retroactively 📉
To put this in perspective, GradPLUS loans currently have interest rates over 9%. 😱 A 1% rate would save borrowers well over $100k on a $100k loan balance over 25 years of repayment. And for those of you pursuing PSLF in ten years, the cost (in accrued interest) of leaving for the private sector may be reduced substantially.

🤔 What’s not changing?
IDR options like PAYE and IBR, along with PSLF, would remain available in this proposal. If that remains the case, borrowers pursuing forgiveness should see little disruption to their long-term plans.

📅 Need a PSLF or repayment strategy session?
Schedule time with us to get a PSLF Assessment and develop/update your strategy: [CLICK HERE]

BenElevate Clients: If your employer is a BenElevate client, your HR can provide you with the link to register with us at no cost.

Happy Thanksgiving from all of us at BenElevate! May your holiday be filled with gratitude, good food, and confidence that you’re on the best path forward.

About Author

Jason DiLorenzo

Jason is the Founder of BenElevate, an early stage fintech company working to address the student debt crisis by bringing to bear tools, expertise, and bespoke solutions to streamline student debt management for borrowers and employers.