Following the SAVE Plan ruling, the U.S. Department of Education has removed the electronic applications for Income-Driven Repayment (IDR) plans and Direct Consolidation loans from StudentAid.gov. In addition, the paper PDF version of the IDR application is also not available. The decision was made without prior notice or detailed guidance, with the department citing the SAVE Plan ruling as the reason for the removal.
SAVE Plan Ruling
Last week, a U.S. federal appeals court issued a ruling blocking the SAVE Plan and preventing loan forgiveness at the end of repayment terms for Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) plans. In response, the Department of Education temporarily removed the electronic IDR and consolidation applications from StudentAid.gov. While the paper PDF application was available, as of Tuesday, Feb. 25, it seems like the paper applications have also been removed. There is talk that the removal of the paper applications are temporary, and there has been a rush to make them available again. However, there has been no official word on the removal of the paper applications from StudentAid.gov. The Department has been making changes to their SAVE Plan announcement page, and at the time of this publishing, it seems like minimal information is being provided.
The SAVE Plan Fall Out
The elimination of the SAVE Plan under the Trump administration was expected, but the ruling on the ICR Plan came as more of a surprise. At the time of the decision, 8 million borrowers were enrolled in the SAVE Plan, and are in an interest-free forbearance. Additionally, 2 million borrowers in the ICR or PAYE plans have also been impacted. For those who reach the end of their 20- or 25-year repayment terms under these plans, they will now enter interest-free forbearance. Unfortunately, there is currently no further guidance on the long-term resolution of their debt.
The ruling on the SAVE Plan does not impact the terms or forgiveness provisions of the Income-Based Repayment (IBR) plan. Likewise, it does not alter forgiveness opportunities under the Public Service Loan Forgiveness (PSLF) program.
Next Step for Affected Borrowers
Borrowers who want to enroll or change their repayment plan to an income-driven plans will need to wait for the applications to become available again. For those in repayment, it's imperative that they continue to make monthly payments as required, to avoid delinquency or default on their federal student loans. Borrowers can still submit a paper application for Direct Consolidation, and this form is available in English and Spanish.
Staying informed about updates affecting student loans is equally important, whether you’re actively repaying, have federal loans, or plan to borrow in the future.