Your top student loan questions answered: What do I need to know about recent changes to the SAVE, IDR, and PSLF programs?

SAVE plan federal court action

On July 18, a federal court paused the Department of Education (ED) from operating the Saving on a Valuable Education (SAVE) plan. This action has no direct relation to the IDR and PSLF programs, however, it affects borrowers enrolled in these programs.

As a result, borrowers enrolled in the SAVE plan were placed in forbearance. Forbearance means that starting in August 2024, SAVE borrowers won’t have to make payments and their loans won’t accrue interest. The time in forbearance will not count toward PSLF or IDR loan forgiveness. Those enrolled in SAVE should have already received communication from their servicer. If you received a bill for August, payments are not required. If you are enrolled in SAVE, log in to your servicer portal. Check that your account is in forbearance and that no payment is due.

How does this affect borrowers in other IDR programs?

Due to the recent court challenges with the SAVE plan, IDR and consolidation applications are offline. Borrowers must submit paper applications to switch IDR plans or to consolidate. Borrowers who submit IDR or consolidation applications will be placed in processing forbearance. It may not count toward PSLF or IDR loan forgiveness.

How does this affect borrowers in the PSLF program?

In the May newsletter, we informed borrowers of the changes in PSLF servicing and servicer transfers. Due to the transfer, some borrowers may find that they are not able to access their PSLF records. Borrowers should note that the record transfer will finish in late fall. After that, they should see all previous PSLF-related documents uploaded.

Final call for two student debt relief programs

September 30, 2024, is the deadline for these student debt relief programs:

1. Fresh Start Program (restart repayment on defaulted loans)
2. Repayment Grace Period (on-ramp repayment after loan delinquency) 

Missed payments after this date can have serious consequences, such as late fees, credit harm, and default. Additionally, wage garnishment, tax refund intercepts, and social security offsets may take place.

Where do I go for help?

We know these changes may be hard for many borrowers. The DFPI is here to help you through these tough times. We recommend that borrowers check their servicer portals for updates. They should also make sure that contact information is current.

We also encourage borrowers to submit a complaint with us if they are having issues with payments, refunds, or accessing their information. California borrowers have protections under the California Student Borrower Bill of Rights. Despite changes to federal programs, they should still get consistent and accurate servicing of their student loans.