SAVE is DEAD. Now what?

SAVE is dead.

By all accounts.

But what does that mean? If you’re in SAVE, do you need to move to another plan now? If not now, when? And what will happen to the accrued interest? Will it be capitalized?

Let me answer those in a second. But first, let me tell you why SAVE is dead.

It’s dead because Judge Ross — i.e., the judge who first put SAVE on hold — signed an order killing most parts of the plan. Specifically, he said that:

“IT IS HEREBY ORDERED that the parties’ joint motion [ECF No. 91] is GRANTED. IT IS FURTHER ORDERED that the SAVE Plan Final Rule (i.e., the Final Rule published on July 10, 2023 at 88 Fed. Reg. 43,820), will be vacated…”

The joint motion he referenced was the agreement that the states that sued to block the SAVE Plan and the Education Department filed back in December, asking the court to kill the SAVE Plan.”

Now, notice I said most parts of the plan. The judge didn’t kill the whole thing. He left one part alone: certain rules regarding how the Education Department handles forbearances and deferments.

I mention that exception because it may help those of you who are in a Chapter 13 bankruptcy or considering filing for Chapter 13 to get credit toward PSLF and IDR Forgiveness while you’re in your case.

Okay, back to what does the ending of SAVE even mean?

If you’re in SAVE, do you need to move to another plan now?

No.

When will you need to move?

Unclear. Best guess is probably no sooner than a couple of months.

When you are moved, what plan will you move to?

Unclear. Best guess is you’d probably be dumped into the Standard Repayment Plan if you don’t proactively apply for another income-driven repayment plan before then.

Will the accrued interest be capitalized when you leave SAVE for another plan?

It shouldn’t. The regulations don’t call for that interest to be added to your balance. That said, keep an eye on your account.

Attorney Adam Minsky and I recorded a whole video discussing the SAVE plan mechanisms and more. But FYI, we recorded that video before this news broke.

On another note: If you have Parent PLUS loans and are considering consolidation to preserve income-driven repayment and PSLF eligibility, the current deadline is June 30, 2026. Consolidations can take six to eight weeks to process.

And as always, if you want to walk through your file and determine whether the issue is eligibility or a record error, you can schedule a consultation here:

https://www.tateesq.com/book-a-call

I’m in a drought with tv shows right now. I’ve spent the past few evenings rewatching 3 Body Problem. But last night I learned that season 2 of Paradise is streaming. I once had high hopes for this show. But this season — especially the end of episode 4, where Sterling Brown’s character is entrusted to travel from TN to GA to CO on a horse. With a newborn. GTFOH!