Two IDR Options Are Back | Who Should Consider Changing Plans?

After months of encouraging borrowers to hold tight before making repayment plan changes, we believe some of you have finally reached decision time.

As of December 16, PAYE (Pay As You Earn) and ICR (Income-Contingent Repayment) are available again. According to updated guidance from the Department of Education, borrowers can now apply for PAYE, ICR, IBR (Income-Based Repayment), and SAVE (formerly REPAYE) if they meet the eligibility requirements. This is in response to the ongoing litigation that blocked the SAVE plan.

Key Takeaways

• PAYE & ICR are back: You can now apply for these programs in addition to IBR and SAVE, which remain available to those who meet eligibility requirements.
• Single borrowers: It’s our hope that if SAVE is blocked, it will revert back to REPAYE without action required from you. Our advice is to ride out the SAVE forbearance; if it remains not PSLF-eligible, the PSLF Buyback option is intended to allow you to buy back those months once you’ve completed the 10 years (that said, the further away from forgiveness you are, the more nebulous this probably is).
• For “Married Filing Separately” borrowers: PAYE only considers the borrower’s income, unlike SAVE, which bases payments on household income. Because we don’t expect SAVE to survive court challenges, it may now be time to move into PAYE or New IBR so that you can resume counting time towards forgiveness at the lowest payment possible.
• Who should ride it out: Borrowers who only have access to ICR or Old IBR (outstanding loans before October 2007) should likely stay in the SAVE forbearance and aim for PSLF buyback if close to 120 payments.
• Application delays expected: Loan servicers are processing repayment plan changes, but backlogs may cause delays of up to 8 weeks. Borrowers may be placed in a “processing forbearance” (interest accrues) or a “general forbearance” (no interest accrual) during this time. These pauses DO count towards PSLF!

What Should You Do?

• Consider your repayment strategy now: If you’re thinking about switching to PAYE or New IBR, now is a good time to assess your options.
• Take advantage of any Holiday downtime: Use any break to review your repayment plan strategy and prepare for a strong start to 2025.
• Register for a PSLF Analysis & Support Session: We’ll update your loan strategy and complete all required action items together.
• BenElevate Clients: If your employer is a BenElevate client, your HR can provide you the link to register and schedule with us at no cost.

Happy Holidays from the BenElevate team, and best wishes for a prosperous and debt-free New Year!

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.