July 1^st has Passed: Four Changes Now In Effect for Borrowers

In our recent updates, we’ve been talking about July 1^st as a cutoff date for retroactive PSLF benefits and other changes as we await the FINAL retroactive account adjustment this Fall. Here are four key changes now in effect that could impact your student loan strategy:

1. PSLF Administration Update: The US Department of Education is now overseeing the PSLF program. If you have questions or need assistance, visit their website at studentaid.gov. Currently, there’s a backlog for phone calls, so consider emailing your queries or trying again later. Share your experience with us if you manage to get through!

2. SAVE Plan Adjustments: Payments under the SAVE (Saving on a Valuable Education) plan have been adjusted to 5% of discretionary income on undergraduate loans. We’re updating our calculations on the BenElevate dashboard to reflect this change, ensuring you have the most accurate projections and expectations.

3. Changes in Consolidation Rules: Consolidated Federal Family Education Loan (FFEL) loans no longer qualify for retroactive PSLF credit. Additionally, if you consolidate Direct Loans with varying qualified payment counts, the new loan will now reflect a weighted average of all qualifying payments.

4. Phasing Out of PAYE: The Pay As You Earn (PAYE) repayment plan is now being phased out. It’s only available to those already enrolled or applied before July 1st. Moving forward, with few exceptions, the SAVE plan will optimize PSLF savings when recertification and tax filing strategies are implemented. For PSLF candidates, a strategic blend of SAVE and/or a 10-year Standard repayment plan remains the best route for achieving optimal financial outcomes, and no additional benefits exist in PAYE.

We’ll continue to keep you informed amidst these and future changes. For additional help:

• BenElevate Clients: You can update your profile anytime in your BenElevate dashboard.
• New to BenElevate or looking for 1-1 support? Register for a PSLF Assessment and 30-minute support session at a 25% discount. These sessions can include communicating with Federal Student Aid, updating your IDR plan, tax filing strategies, etc. We invite spouses and Financial Advisors to attend as well.

Otherwise, we hope you’re enjoying your summer, and remember…. ‘til DEBT do us part.

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.