Student-loan borrowers are waiting to be pushed off a key repayment plan. A new legal filing asks for a timeline.
The Education Department said student-loan borrowers will be put on the most expensive repayment plan if they don't leave SAVE. That hasn't happened.
A new legal filing has been submitted to the Education Department, requesting information on when student-loan borrowers will be removed from the SAVE repayment plan. The SAVE plan, introduced by the Biden administration, offered lower monthly payments and a quicker path to debt relief compared to the standard repayment plan.
The Education Department began notifying the 7.5 million borrowers enrolled in SAVE in July, giving them a 90-day window to transition to a new plan. However, instead of automatically placing borrowers on the standard plan after their 90-day deadline, the department extended the deadline by an additional 30 days, which has now passed for some borrowers.
Despite this extension, borrowers who failed to transition by the final deadline continue to be in forbearance, with no information on their new payment obligations. The latest legal filing seeks clarity on the department's timeline for involuntarily moving borrowers off SAVE.
Public Goods Practice, the law firm representing the borrowers, had previously filed a motion to block involuntary transfers from SAVE. The department rejected the motion at the time, urging borrowers to enroll in a lawful repayment option. Since then, borrowers have faced higher monthly payments under the Repayment Assistance Plan (RAP), leading to concerns about wage garnishment and the loss of federal benefits due to potential defaults.
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