Guidance outlines move to other repayment options following court-approved settlement
The Department of Education recently announced guidance directing borrowers enrolled in the SAVE repayment plan to transition to other federal student loan repayment options following court actions ending the program. The department said notices will be sent to approximately 7.5 million borrowers, who will be given at least 90 days to select a different repayment plan. Borrowers who do not choose an option within the time frame may be automatically placed into a standard or tiered repayment structure once the transition period begins.
The department said “loan servicers” will begin contacting borrowers ahead of a July 1 rollout of updated repayment options, including a new Repayment Assistance Plan and a tiered standard plan with varying repayment terms.
“Borrowers currently enrolled in the illegal SAVE Plan will be given at least 90 days to enter a legal repayment plan of their choice, including the new Repayment Assistance Plan, which will launch on July 1,” said Under Secretary of Education Nicholas Kent.
The Office of Federal Student Aid will provide instructions and application support, including income-driven repayment enrollment processes. Officials said the changes follow a settlement ending the SAVE plan and are intended to transition borrowers into repayment structures permitted under current policy.
As the Lord Leads, Pray with Us…
- For Under Secretary Nicholas Kent as he oversees borrower transitions.
- For officials in the Department of Education and the Office of Federal Student Aid as they communicate repayment options and deadlines.
- For student loan borrowers and loan servicers as they adapt to the updated repayment options.
Sources: Department of Education
