By Danielle Arlotta, CFP®, Lead Planner
Over the past year there have been quite a few changes to federal student loan repayment. We talked about the major changes in the newsletter previously.
There was recently a federal court action against the SAVE plan, meaning that the education department cannot operate that repayment plan until that action is resolved. This is where you will find the most up to date information on the progress.
What does this mean for you as a borrower though? If you are on the SAVE plan you will receive a notification from your lender that you are in administrative forbearance. You will have $0 payments and accrue no interest during this time.
For most this won’t affect you since $0 monthly payments and no interest accruing are always useful! If you are on track for Public Service Loan Forgiveness (10 years) or the Income-Driven Repayment Plan forgiveness (20-25 years) and are close to those you will want to consider changing to a new IDR plan. You can check how your payment changes with each payment plan here.
There will probably be more changes with student loans over the next few years. The most important thing is to keep an eye on your accounts and make sure your loan provider has your current contact information so that you have the most up to date information for your accounts.
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