"The online application for income-driven repayment plans is back after a two-month hiatus, but options for borrowers remain limited. If you're currently on the Saving on a Valuable Education repayment plan, which has been blocked by a court injunction, you may be wondering if you should switch to a different plan," CNET reports.

..."The future of the SAVE repayment plan is up in the air, but jumping ship to an alternative plan may not be worth it, experts say. For one, changing plans could increase your borrowing costs.

'Changing plans may result in an increase in the borrower's monthly payment, as well as additional interest accrual,' said student loan lawyer Adam Minsky. 

Megan Walter, senior policy analyst at the National Association of Financial Aid Administrators, also warned against changing plans if you've already met the qualifying payment requirement for IDR loan forgiveness. If SAVE is approved, you'll be able to see debt relief faster if you stay on this plan.

Currently, your options for other income-driven repayment plans are also limited. Even though the online application is available again, most borrowers can only access the Income-Based Repayment plan. 

Loan servicers are not processing new enrollments for the PAYE plan, and only borrowers with a consolidation loan that repaid a parent PLUS loan can get on Income-Contingent Repayment. 

There are also significant processing delays, and borrowers who try to make a change could end up in a 60-day processing forbearance, during which interest charges will accrue."

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: 10/30/2024