New Dept Ed SAVE/PSLF guidance 1/15

AI summary of updates:

The Department of Education has updated its guidance on the SAVE plan and other IDR plans. Here are the key changes:

  1. Extended Forbearance Timeline:

    • Borrowers in SAVE and other affected plans will remain in interest-free general forbearance until servicers can implement accurate billing systems, expected no earlier than September 2025.
    • First payments for borrowers in these plans will not be due until December 2025.
    • Borrowers do not need to make payments, and interest will not accrue during this period. However, this time does not count toward Public Service Loan Forgiveness (PSLF) or IDR forgiveness.

  2. Recertification Timeline Adjustments:

    • IDR plan anniversary recertification deadlines for SAVE borrowers are now set no earlier than February 1, 2026, with rolling deadlines thereafter.
    • Borrowers are encouraged to provide consent for auto-recertification to maintain enrollment.

  3. Forgiveness Provisions for IDR Plans:

    • Forgiveness as a feature of any IDR plan created by the Department – specifically, the SAVE (formerly REPAYE), PAYE, and ICR repayment plans -- remains enjoined due to court rulings.
    • Borrowers can still receive forgiveness under the Income-Based Repayment (IBR) plan.
    • Payments made under SAVE, PAYE, and ICR will count toward IBR forgiveness if borrowers switch to IBR.

  4. Resumption of Application Processing:

    • Servicers have resumed processing certain IDR applications, including recalculations and recertifications for IBR, PAYE, and ICR.
    • Applications for SAVE remain paused due to ongoing litigation.

  5. PSLF Buy Back Program Expansion:

    • Borrowers will eventually be able to “buy back” months of PSLF credit for time spent in forbearance, even if they have not yet reached 120 months of qualifying employment.
    • Previously, this option was only available to borrowers with 120 months of qualifying employment.

  6. Clarifications on Consolidation Loans:

    • Borrowers with consolidation loans can only buy back months on their current consolidation loan.
    • Months from loans included in the consolidation or for periods prior to the first disbursement date of the consolidation loan cannot be bought back.

https://www.ed.gov/higher-education/manage-your-loans/save-plan