Two federal judges have temporarily blocked parts of the SAVE student loan income-driven repayment plan. The SAVE Plan, (Saving on a Valuable Education) replaced REPAYE and was planned to be fully rolled out in July.

Borrowers on SAVE can lower their monthly payments and earn debt forgiveness after as little as 10 years of payments. Other IDR plans included debt forgiveness after 20 or 25 years.

The SAVE plan has proven to be a popular choice to help borrowers reduce their monthly payments Nearly 8 million, or 1 in 5 student loan borrowers, have enrolled in SAVE since its rollout last year.

IonTuition has online applications for the SAVE plan through its student loan repayment management portal and has become a key part of college default aversion strategies.

What’s on Hold for the SAVE Plan?

  • Debt Cancellation: The court paused the debt cancellation under the SAVE plan.
  • Payment Reduction: The Biden administration planned to recalculate payments for borrowers on the SAVE plan in July. The new calculation would use 5% of discretionary income instead of 10%, reducing montly payments by half. It’s unclear what will happen.

What happens to Student Loan Borrowers on SAVE?

If you’re enrolled in SAVE, your current payment should remain unchanged. It’s unclear if the federal court’s ruling will block future SAVE enrollments.

The Department of Education’s press release indicated they plan to defend the SAVE plan and review the rulings.

“While we continue to review these rulings, the SAVE plan still means lower monthly payments for millions of borrowers – including more than 4 million borrowers who owe no payments at all, and protections for borrowers facing runaway interest when they are making their monthly payments.”

– ED Press Release

IonTuition is Here to Help

We will continue to monitor the situation and provide updates. IonTuition users can still manage their SAVE plan through IonTuition, including monitoring their payment amounts and connecting to live repayment specialists for questions or to connect to their servicer.

We feel borrowers’ frustration, especially since the student loan payment pause and resumption. We remain committed to navigating our users through the chaotic student loan journey no matter how many court decisions come up.