Loan servicers began sending July 1 notices that start a 90-day deadline for borrowers in the SAVE repayment plan, part of parent plus loan forgiveness changes that now push affected borrowers toward another repayment option. The earliest deadline to leave SAVE falls on September 29.
Cameron Green, a federal student loan borrower, said his balance is about $135,000 and has hardly moved over the last decade of repayment. He said, “The only thing I can do is tighten the budgets more, and somehow come up with the money,” and added, “It's the only…debts we can't escape,” describing a balance he does not believe he will ever get to $0.
July 1 notices for SAVE borrowers
Nelnet said it is reaching out to its borrowers in waves, and that sequence means each borrower’s deadline depends on when the email arrives. Some borrowers could receive a notice as late as March of next year, so the 90-day clock will not end at the same time for everyone.
If borrowers do not switch within the 90-day period their servicer gives them, they will be automatically enrolled into the Standard Repayment Plan, RAP, or the new Tiered Standard Plan. They can also choose IBR, PAYE, or ICR instead of waiting for the automatic transfer.
Public Goods Practice motion
On June 23, Public Goods Practice filed a motion for four student loan borrowers asking that borrowers in the SAVE Plan not be automatically transitioned to another plan while the lawsuit challenging the plan’s changes remains undecided. That filing puts a court request in front of the servicer-driven deadline, but the notices are already going out.
Jaylon Herbin, director of federal campaigns for the Center for Responsible Lending, said, “Anything could happen, because it is litigation.” He also said, “Yes, I think what can happen is this: we have two years left in this current administration, but we also have advocacy that's taking place right now,” and that, “The advocacy that's taking place right now is asking for a payment pause, currently, so that people can have enough time to review everything.”
Jaylon Herbin complaints
Herbin said borrowers who think their loan service providers are acting in a predatory manner have complaint options. “We always tell people to reach out to their consumer protection bureau and their [attorney general’s] office,” he said, adding, “There's still the Student Ombudsman's office, while it's not as active as it was, they're still taking complaints, so you can file a complaint online as well.”
For borrowers in SAVE, the practical step is to watch for the servicer email, count 90 days from that notice, and choose another plan before the deadline if they do not want an automatic move into one of the repayment options. The lawsuit may seek to slow that process, but the notices set the timeline borrowers have to follow right now.
