Federal Student Loan Borrowers Get Reprieve
No Payments or Interest Accrual During Administrative Forbearance Period
Federal student loan borrowers in the Biden administration’s SAVE plan don’t have to make payments right now. The U.S. Department of Education has put them into an administrative forbearance which means they can pause payments while legal issues with the SAVE plan are sorted out. During this break and no interest will add up on their loans, according to the report of CNBC.
(photo: Vox)
Federal Appeals Court Blocks SAVE Plan
The SAVE plan launched in summer 2023, has stirred up controversy. Some critics say it goes too far by offering the lowest monthly payments and faster forgiveness for smaller loan amounts. Republican-led states have challenged the plan especially after the Supreme Court blocked a wider debt forgiveness plan in June 2023.
The future of SAVE is unclear after a federal appeals court blocked it on July 18. The Education Department is working to get the plan back in place, but for now, borrowers should know that the forbearance won’t count towards their progress for loan forgiveness. While they don’t have to make payments during this time and it won’t affect their long-term path to debt cancellation.
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