Student Loan Repayment FAQs: All Your Questions Answered
Get straightforward answers to your student loan questions, including the SAVE Plan lawsuit, repayment options, forgiveness programs, and more.
Overview
This guide answers the most common questions borrowers have, from lowering payments to understanding forgiveness options.
Related: Who Do You Contact About Repayment Plans?
1. Questions About The SAVE PlanSAVE Plan (SAVE)The Saving on a Valuable Education Plan, a federal income-driven repayment plan introduced in 2023 to replace REPAYE. Its implementation has been subject to ongoing litigation, and enrolled borrowers have faced court-ordered forbearance periods.
What is the SAVE Plan, and how does it impact student loan repayment?
The SAVE Plan is an Income-driven repaymentIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments. option that calculates payments based on income and family size, often reducing payments to as little as $0 for low earners.
It aims to make student loan repayment more manageable by adjusting payments according to your financial situation.
How does the SAVE Plan calculate my monthly payment?
The SAVE Plan calculates your monthly payment as a percentage of your discretionary income, which is determined based on your income and family size.
Typically, payments are capped at a certain percentage to ensure affordability, and for some low-income earners, payments could be reduced to $0.
What happens to my repayment schedule under the SAVE Plan while the lawsuit is ongoing?
Borrowers enrolled in the SAVE Plan are currently placed in administrative forbearance as the lawsuit continues. During this time, no payments are required, and interest does not accrue.
Why are borrowers in the SAVE Plan placed in administrative forbearance, and should I continue making payments?
Borrowers enrolled in the SAVE Plan have been placed in administrative forbearance due to legal challenges that have temporarily blocked the implementation of this Income-driven repayment plan.
The forbearance is a result of a federal court injunction, which has prevented the U.S. Department of EducationU.S. Department of Education (ED)The federal agency that oversees federal student aid programs, issues regulations for federal student loans, and is the ultimate lender on Direct Loans. from billing borrowers. You may choose to continue making payments to reduce your balance faster, although it’s not required.
How long will I be in an administrative forbearance?
The forbearance began in late June 2024 and is anticipated to last until at least April 2025, depending on the resolution of the legal issues surrounding the SAVE Plan.
The minimum duration is set at six months, but it could extend beyond this timeframe, potentially lasting up to a year or more if legal disputes continue.
Related: SAVE Plan Forbearance
Can I change repayment plans from SAVE? If so, what are my options?
Yes, you can change repayment plans from the SAVE Plan. Your options include switching to the Standard, Graduated, Extended, or other income-driven plans like Income-Based Repayment or possibly the Pay As You Earn and Income-Contingent RepaymentIncome-Contingent Repayment (ICR)The oldest federal income-driven repayment plan, with payments generally set at 20% of discretionary income or a fixed 12-year amount, whichever is lower. It is the only IDR plan available to Parent PLUS borrowers after consolidation. Plans. Contact your loan servicerLoan ServicerThe company that manages a borrower's federal student loan account, processes payments, and handles applications for repayment plans, deferment, forbearance, and forgiveness on behalf of the U.S. Department of Education. to discuss eligibility and the best plan for your needs.
Related: Student Loan Repayment Options
What repayment options are available for borrowers who applied for SAVE but are not yet enrolled?
Borrowers who applied for the SAVE Plan but are not yet enrolled can consider other available options, such as Income-driven repayment plans or the Standard, Extended, or Graduated plans until their enrollment is confirmed. Contact your loan servicer for further guidance.
Will interest be capitalized under the SAVE Plan during the lawsuit?
No, interest will not be capitalized under the SAVE Plan during the administrative forbearance caused by the ongoing lawsuit. Interest does not build up while payments are paused, helping to prevent your balance from increasing unnecessarily.
How does the lawsuit impact IDR recertification requirements?
Due to the ongoing lawsuit, the Department of Education has directed student loan servicers to extend the IDR recertification deadline to November 2, 2025.
Borrowers enrolled in SAVE will not need to recertify their income until then, and this change does not affect your current repayment status or monthly payment amount. Your servicer will provide reminders prior to the new recertification deadline.
2. Getting Started with Repayment Plans
Do I have to pick a repayment plan?
Yes, all federal student loan borrowers must select a repayment plan when their grace period ends. If you do not choose, you will automatically be placed in the Standard Repayment Plan. You can later switch to another plan if it better suits your financial situation.
How long is the grace period for student loan repayment?
Most federal student loans have a six-month grace period that starts after you graduate, leave school, or drop below half-time enrollment. During this time, no payments are required, but interest may still accrue, depending on the loan type.
Related: Guide to Student Loan Grace Periods
Where do I sign up for a different repayment plan?
You can sign up for a different repayment plan by visiting StudentAid.gov and logging into your account. You can also contact your loan servicer directly to discuss your options and initiate a repayment plan change.
What repayment plans qualify for student loan forgiveness programs?
Related: What Repayment Plans Qualify for PSLF?
3. Repayment Plan Options
What are the options for repayment plans?
Federal student loan borrowers can choose from several repayment options, including Standard, Graduated, Extended, and Income-Driven Repayment plans like IBR. As of December 2024, the Department of Education has reopened applications for PAYEPay As You Earn (PAYE)A federal income-driven repayment plan that caps monthly payments at 10% of discretionary income and forgives remaining debt after 20 years. It is only available to borrowers who took out their first federal loans on or after October 1, 2007. and ICR, adding more repayment flexibility for borrowers while the SAVE Plan lawsuit continues.
Each plan offers different terms to fit your financial situation. Contact your loan servicer to explore your options.
Related: Is SAVE and IDR the Same?
What student loans are eligible for Income-driven repayment plans?
FFEL and Perkins loans typically receive better repayment options after consolidation, such as eligibility for more flexible IDR plans.
Are there repayment options specifically for Parent PLUS loans?
Yes, Parent PLUS loans can be repaid through the Standard, Graduated, or Extended plans. They are also eligible for Income-Contingent Repayment if consolidated into a Direct Consolidation Loan or the SAVE or IBRIncome-Based Repayment (IBR)A federal income-driven repayment plan that caps monthly payments at 10% or 15% of discretionary income, depending on when the loans were taken out. Remaining debt is forgiven after 20 or 25 years of qualifying payments. plans through the double consolidation loophole. This helps parents manage payments based on their income.
Related: Student Loan Repayment Options
What is the difference between federal and private student loans in terms of repayment?
Federal student loans offer more flexibility in repayment options, including Income-driven repayment and potential forgiveness, whereas private student loans typically have fewer repayment options and no forgiveness programs.
Federal loans also allow deferment or forbearance in times of financial hardship, which is less common with private loans.
Contact your private lender to find out what repayment options they offer.
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4. Making Changes to Repayment Plans
Can I change repayment plans?
Yes, you can change your repayment plan at any time. Depending on your financial situation, you may switch to an Income-driven repayment plan or choose options like the Standard, Graduated, or Extended plans.
Related: How Do I Change My Student Loan Repayment Plan?
How does loan consolidation impact my repayment plan?
Consolidating your federal loans can simplify repayment by combining multiple loans into one. This may also provide access to additional repayment options, such as income-driven plans, but it could reset your progress toward forgiveness programs and result in paying more interest over time.
Related: Does Student Loan Consolidation Affect Your Credit Score?
Can I still qualify for forgiveness if I switch repayment plans?
Yes, switching repayment plans does not disqualify you from forgiveness as long as you stay in an eligible plan, such as an income-driven repayment plan. But, switching may affect how much time is required to achieve forgiveness, especially under PSLF or IDR forgivenessIDR ForgivenessThe forgiveness of any remaining federal student loan balance after a borrower has completed 20 or 25 years of qualifying payments under an income-driven repayment plan, depending on the specific plan..
Related: Repayment Plans that Qualify for PSLF
5. Managing Repayment and Costs
Do I have to include my spouse’s income for student loan repayment?
If you are married and file taxes jointly, your spouse’s income will be included when calculating your payments under Income-driven repayment plans. But if you do not have reasonable access to your spouse’s income—such as in cases of separation or limited financial communication—you may be able to provide a signed statement explaining your circumstances to exclude their income.
If you file separately, only your income is considered, although this may limit some repayment options.
Related: How Spousal Income Affects Income-Driven Repayment Plans
How do interest rates affect my repayment plan?
Interest rates determine how much extra you pay over time in addition to the principal. Fixed-rate loans have an interest rate that stays the same, while variable-rate loans can change.
Lower interest rates mean less cost overall, so understanding your interest type and rate is key for managing repayment.
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What repayment plan is best for minimizing overall interest paid?
The Standard Repayment Plan generally minimizes interest paid over time, as it requires fixed monthly payments that fully repay the loan within 10 years.
Income-driven plans may result in more interest due to a longer repayment term, but they offer lower monthly payments for those who need it.
Can I make extra payments to pay off my loan faster?
Yes, you can make extra payments on your student loan without penalties. Making additional payments will reduce the principal balance faster, which in turn reduces the amount of interest you’ll pay over time. Be sure to specify that extra payments should go towards the principal.
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6. Payment Challenges
How do I postpone my student loan payments?
You can postpone your student loan payments by applying for deferment or forbearance. Deferment is generally available if you meet certain eligibility requirements, like being in school or experiencing economic hardship.
Forbearance is available if you are temporarily unable to make payments, though interest will continue to accrue during this time.
Related: Can’t Pay Your Loans? Consider Forbearance or Deferment
What happens if I miss a payment on my student loan?
If you miss a payment, your loan becomes delinquent, which may affect your credit score. After 90 days, it will be reported to the credit bureaus.
If you continue to miss payments for 270 days, your loan will go into defaultDefaultThe status of a federal student loan after the borrower has failed to make required payments for 270 days. Default can trigger collection actions such as wage garnishment, tax refund offset, and damage to credit reports., which can result in wage garnishment and other serious financial consequences.
Related: Understanding Delinquency vs. Default in Student Loans
Bottom Line
If you want to learn more about repayment options, forgiveness programs, or how to tackle your student loan challenges, we’re here for you.
Our student loan lawyers can help make things clearer and guide you through your options. Book a call today or sign up for our newsletter to stay informed.
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