Payment Holiday & Update to SAVE Coming in July

If we’ve been a little more active in our outreach lately, it’s only because we’ve had good news to share. And today is no exception…

The Education Department has told its loan servicers to offer a one-month “administrative forbearance” for July while a change is implemented for everyone in the SAVE repayment plan, which is now 8 million people (and probably should be a lot more).

What’s this change, you ask? Currently, the SAVE plan requires a monthly payment calculated off of 10% of your discretionary income. On July 1st, the payment will drop to 5% on undergraduate debt only. Here’s three examples of how this will work:

  • If you only have undergraduate debt, your SAVE payment will be cut in half after July.
  • If you only took out graduate loans, your payment will remain the same.
  • If you have both loan types, your payment will be based on a weighted average. For example, if ½ of your debt was undergrad and the other half graduate, your payment will be reduced to 7.5% of your discretionary income.

No matter which of these categories you fall into, you won’t be required to make a payment in July… and this time WILL still count towards PSLF!

Lastly, if you’re married and you live in a Community Property tax state (see list here if you don’t know), then this brief but important strategy applies to you: https://ai.invideo.io/watch/H7slCjUXovN

Ok, that’s all for now! But as always, ‘til debt do us part.

Schedule a 1-1 Support Session for a 25% discount here.

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.

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