Everything You Need to Know About Income-Driven Repayment, Including the New SAVE Plan

"A new student loan reality is here for 44 millions federal borrowers. Emergency forbearance is coming to an end, interest has already started accruing on federal loans and repayment is set to restart in October. If you’re concerned about student loan bills squeezing your budget, consider an income-driven repayment plan," The Wall Street Journal reports.

... "'An income-driven repayment plan can be very beneficial for borrowers who are struggling to meet their monthly payment obligations,' says Karen McCarthy, vice president of public policy and federal relations at the National Association for Student Financial Aid Administrators."

"Keep in mind, however, that income-driven repayment isn’t for everyone. If you can afford higher student loan bills, it might be better to stick with the 10-year Standard Repayment Plan. That way, you’ll be out of debt in a decade and may pay less interest than you would if you switched to IDR."

"'Borrowers should weigh their priorities and current financial situation when making the decision,' says McCarthy. 'The good news is, you are not tied to a repayment plan and can apply for a new plan at any time.'"

"Now, however, you have the option of giving the Education Department access to your tax information so it can automatically recertify your plan each year. If you take advantage of this option, you won’t have to worry about missing your recertification date or getting kicked off the plan."

"'Income recertification “has been an unnecessarily burdensome obstacle for many borrowers,' says McCarthy. 'Allowing for direct data sharing between the Education Department and the IRS will simplify and streamline the process.'"

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.


Publication Date: 9/6/2023

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