Student loan borrowers are now unable to apply for an income-driven repayment plan immediately. This is the next one that experts say
If you are looking for more affordable student loans or even hope for forgiveness, the future may be bleak.
Following the February 18 Court of Appeal’s ruling on rescue, experts encourage savings borrowers to explore other income-driven repayment (IDR) programs. However, the Ministry of Education recently closed applications for the IDR program, allowing Save borrowers and anyone else who wishes to sign up for income-driven repayments in Limbo.
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“It is unclear how long IDR applications will not last,” said Elaine Rubin, a student loan policy expert, member of the CNET Expert Review Board and consultant Edvisors. “Unfortunately, borrowers who want to join the repayment program to better manage their monthly payments cannot complete the application before they come back.”
The latest setbacks are a series of federal changes in high heels caused by President Donald Trump’s administration, including layoffs from the Department of Education and a proposal to completely close the federal agency.
What does all of this mean for your student loan and repayment options? We talked with experts to find out.
What happened to save?
If you’re panicked about the end of the save, that’s understandable. Although the save has not been officially cancelled yet, it may only be a matter of time.
For the past eight months, anyone participating in Save has placed its loans in administrative tolerance. You don’t have to worry about resuming payments until this tolerance ends. The period of tolerance to preserve borrowers is expected to end in 2025, but it seems likely to recover faster.
“Those who are participating in the relief package should be careful to watch out for what will happen in the coming months, because at some point their loan will go into repayment,” Rubin said.
What should the savings borrower do next?
Experts encourage Save borrowers to explore repayment options through other income-driven repayment programs. When the IDR application is lowered, you can still check your own eligibility and expected monthly payment methods using sudentaid.gov’s loan simulator. Currently, other IDR plans offer monthly payments above savings, but may be below the standard repayment plan.
However, even if you are eligible to save, you may find yourself ineligible to join another IDR program. CNET contributor Dana Miranda recently wrote about exploring her student loan repayment options. She now expects her monthly student loan payments to be from $0 $488.
When your payment is suspended, Rubin recommends taking steps to prepare. This may mean adjusting your budget or evaluating your options with a financial advisor.
“You may be in a stagnant state, but you can also take other actions to put yourself in a better financial position,” Rubin said. “We have seen people put the expected monthly payment amount in high-yield savings accounts while others pay off their credit card and car debts, and they can contribute more to those debts.”
If you are facing financial difficulties, talk to your student loan service provider about your extension or patience options.
Should borrowers of other IDRs be worried?
Since income-driven other repayment plans, such as PAYE and income repayment (ICR), have written them into the law, Rubin said they are unlikely to be removed, although they can be adjusted. Currently, Rubin says borrowers should continue to pay on time.
It is unclear how forgiveness through existing IDRs will be removed.
Currently, income-driven repayment programs such as PAYE and ICR provide forgiveness to borrowers after 20 to 25 years of eligible payments.
“Forgiveness has now been blocked and there is concern about the end of the ICR and Paye program,” Rubin said. “After 20 or 25 years of payment, there is still uncertainty on how to manage the remaining balance in the long run.”
If you participate in any income-driven repayment program and reach the end of the repayment period, Rubin said you will be placed in an interest-free tolerance period until the court finalizes the student loan forgiveness.
Is Public Service Loan Forgiveness Still Available?
The government’s Public Service Loan Forgiveness Program (which can help teachers, nurses and other civil servants forgive their loan balances after 10 years of payment – remains in effect.
For those currently attending PSLF, the program seems to be safe at the moment. Linda McMahon told Senators at a confirmation hearing of the Education Secretary last month that the Education Department will commemorate the Public Student Loan Forgiveness Program because it was created by Congress.
However, debt relief may take longer for borrowers of Save, who are working for PSLF. While your loan is still on hold during the administrative tolerance period, you will not be able to obtain PSLF’s on-time payment credit. This may extend your repayment schedule.
There is another wrinkle for federal employees: Since the purpose of the newly formed government efficiency department is to reduce the size of the federal workforce, fired public officials may no longer be eligible for PSLF. The program does allow participants to recover PSLF if they receive another public service job.
If you are eligible for a federal loan from PSLF and you have been in public service for 10 years or more, you may be eligible for forgiveness faster through the PSLF repo program. This is how it works.
Should you consider refinancing a private program?
If you are considering refinancing federal student loans with a private lender, experts say highly cautious.
When you refinance your federal student loan through a private lender, you forfeit federal loan offers, including forgiveness, debt relief, income repayment repayment programs and administrative expectations, such as the current payment suspension for savings.
“There are few people recommending it,” Rubin said. “If you struggle in the federal market, the private market can bring more challenges. Just because you see a low advertising, engaging speed, that doesn’t mean you get that interest rate. We’ve seen buyers with good reputations don’t get the kind of price they expect.”
