Your understanding of the situation appears to be correct. Switching from IBR to SAVE only requires consoldiation for certain loan types, such as FFEL.

The interest will also be capitalized when you switch. That is required by statute.

My loans are all entirely federal direct loans, and according to my servicer (Mohela) they are all eligible for the SAVE plan already.

So, if I understand correctly, no consolidation is necessary for switching from IBR to SAVE, which in turn means that I could switch at any point in time (prior to or after 12/31/23 would make no difference), and no progress would be lost on forgiveness.

Unfortunately because I have an older IBR, all of the interest currently accrued will apparently be capitalized, but then further interest would not accumulate as long as I’m making the minimum monthly payments. (I was actually originally told by Mohela that it would *not* capitalize if switching from IBR to SAVE, but many people have reported on various forums and Reddit threads that theirs did when they made the switch.)

The switching to SAVE and consolidating into a SAVE plan is a very meaningful difference.

This article talks about switching from an IDR plan like IBR to the SAVE plan. In most cases, consolidation is not a required step.

However, some loans are not eligible for the SAVE plan, such as FFEL loans. These loans can get consolidated into a federal direct loan, which is eligible for the SAVE plan. If you are in this category, you will definitely want to consolidate before the 12/31/23 deadline. This article explains the timeline and what happens to payment counts when you consolidate into a new loan.

On a side note, it would be nice to see an article about why these are the only loans you can’t dissolve through bankruptcy. Con men and charlatans can do outright malicious things and get off scot-free by declaring bankruptcy, but so many of us are stuck under crippling debt for life because we made the naive mistake of listening to everyone tell us that higher education was the path to financial well-being in our teens and early 20s.

Sources:
https://www.investopedia.com/new-repayment-plans-could-be-saving-grace-for-stretched-student-loan-borrowers-7974644#citation-3

https://www2.ed.gov/policy/highered/reg/hearulemaking/2021/idrfactsheetfinal.pdf

Great questions here.

There are a couple of things I’d like to put on your radar. First, at some point next year, they will be updating IDR payment counts. For you, it means your years on the graduated repayment plan will count toward the 20-25 years for forgiveness.

However, to finish the remaining 20-25 years, you will need to sign up for an IDR plan, like SAVE. The good news is that switching to SAVE will not restart your progress.

Wonderful. Thank you so much for your time and insight. This website has been a HUGE help during this process.

The SAVE plan is absolutely an IDR plan. It was designed to pretty much replace the other IDR plans. For the vast majority of borrowers it is the best IDR option. Given that you only have undergraduate loans, it is almost certianly the best IDR option available.

Thank you so much for this information.

I spent some time on the studentgov site (prior to seeing your reply) and they had my forgiveness eligibility date as 2038, which makes no sense as I started paying my loans back in 2010. (I have never defaulted on payment.) Which is why I was asking about the count tracker. I will check out the information you shared above. Thank you.

One more question, please: Is the SAVE plan also considered an IDR? I graduated in 2009 as an undergrad and have been on the IDR since 2010. What I still owe (esp compared to what I borrowed) is a ridiculously large number—upwards of $70k. (I make less than that a year.) I am crossing my fingers and chasing forgiveness at this point. I switched over to the SAVE plan but I am very nervous that it is going to mess with my 20 year forgiveness count down. I’ve read your blogs of the comparisons between IDR AND SAVE, but they seem to always refer to graduate loans or new borrowers. Given what i’ve shared with you, is the SAVE plan safe for me?

There really isn’t a good place for the count. Right now the best you can do is to pull your records from studentaid.gov. You won’t see payment amounts, but you will see periods of repayment, forbearances, etc.

Then you can compare those records to the IDR Count Update rules to see where you stand. Once the IDR count update is complete, which should happen in early 2024, I suspect they will make an updated count much easier to find.