That is a fantastic question. In the senario I described where parts of SAVE survive, the interest subsidy could very well survive. At this point its really just speculation. If SAVE is completely eliminated, then the insterst subsidy would go away.

However, even in that scenario, SAVE likely reverts back to REPAYE, and the REPAYE plan had a subsidy that covered 50% of the excess interest. Not as good as SAVE, but also better than nothing.

That’s good to know, thanks for the clarification.

You are definitely right about the ambiguity of the order from the 8th Circuit. However, I read it a little differently than the person who wrote the article you are referencing. The confusion centers around people who are on the ICR plan or the PAYE plan who reach the 20 or 25 years required for forgiveness. Under the order from the court, this sort of forgiveness arguably isn’t permitted, but that isn’t what the case is about at all.

PSLF forgiveness is an entirely different variety of forgiveness and I’m not sure how the order from the 8th circuit could be read to suggest that it wouldn’t count.

The issue for PSLF people is that those enrolled in SAVE are on a litigation forbearance that doesn’t count toward PSLF. In other words, you are not getting a monthly bill, so you can’t move any closer to 120. This is where the buyback enters the equation.

The buyback is a newer process and there are typically issues with any new federal student loan process, but if it works as planned, the SAVE litigation shouldn’t prevent you from getting PSLF.

My question is, if you were in SAVE and reached 120 payments prior to the July 18 ruling but had not had your loans forgiven yet, will Ed still process your forgiveness? Or are they putting all PSLF forgiveness on hold right now for anyone in SAVE?

In my case, I would have hit 116 payments on July 16 (but was in the SAVE recalculation forbearance for June and July). I also have 4 months of forebearances from 2017 that I intended to request a buyback for in July once I hit that 116th payment. If by some miracle the buyback process works I would technically have been eligible for forgiveness as of July 16, prior to the injunction. So would they process that forgiveness or will I be on hold solely because I’m in the SAVE program?

Hi Bernard!

There are a lot of great questions here. First, I will say that I don’t think you need to worry about starting from scratch. You are right that the decision to consolidate and sign up for SAVE wasn’t your fault at all, you just followed the guidance of the Department of Education and their servicers. Likewise, I wouldn’t put too much thought into what “they” might say about it. Student loans have become a political football and it wouldn’t be wise to let the political rhetoric of others impact your decision-making.

As for your options, it isn’t immediately clear at this point. I’ve previously written about how the litigation and SAVE regulations could impact other repayment plans. I’d suggest you start there. I’d guess the most likely outcome is that either SAVE wins in court or you end up on the REPAYE plan with credit for your previous payments.

Obviously, there are a number of other factors, some unique to you, that will impact exactly how this plays out, but hopefully that gives you some idea of where this all might be headed.

I had a 20 year old loan being paid with an IDR plan.
It was suggested that I apply for SAVE. First I had to consolidate my loans. That was approved. Then I was caught in this mess.

What are my possible options. Will I have to pay the full payment, or will I have options to go back to. If it fails, I should be able to go back to what I had ????

I had something. Why should I be forced into this, I wasn’t my fault.
Of course , they will say it is because I’m trying to get something for nothing. This case is a little involved than just this.

Thank you for any educated insight.

Thanks Mike! We will wait until 10/6 and see how things turn out. Hopefully her application is processes by then and Mohela put her on general forbearance – at least interest would stop accumulating.

First, let me say I’m hesitant to give specific suggestions without having a longer conversation to make sure nothing gets missed or overlooked.

That said, generally speaking, I think the move to a processing forbearance is a good idea. This week the Department of Education gave an update on the processing times and procedure at present.

The pertinent detail for your daughter is that borrowers who apply for SAVE get put on a 60 day processing forbearance. During that time, interest is charged, but it also counts toward IDR and PLSF forgiveness. Once those 60 days pass, if the application still hasn’t been processed, the borrower goes on a general forbearance where interest isn’t charged, but the time no longer counts toward IDR and PSLF forgiveness (unless you use the buyback provision).

As a final thought, I wouldn’t be so quick to dismiss PSLF. Six years of residency and fellowships puts her only 4 years away from forgiveness. Obviously, there is a real possiblity that repayment in full ends up being the most efficient approach, but it could be a mistake to assume that it is definitively the path forward.