Summary
Many people with federal student loans will see changes to their monthly payments after a court blocked the SAVE repayment plan. This could make monthly payments much higher for many borrowers, impacting their financial situation.
Key Facts
- The SAVE plan, meant to lower student loan payments by tying them to income, is no longer in effect.
- The plan was blocked by the Eighth Circuit Court of Appeals.
- Borrowers could see their payments go up by as much as $400 per month.
- Previously, SAVE allowed some low- and middle-income borrowers to have reduced or even $0 monthly payments.
- With SAVE ending, borrowers will return to older repayment plans that usually mean higher payments and faster interest buildup.
- The U.S. Department of Education has stated that borrowers will no longer get the benefits of the SAVE plan.
- The changes come as the Biden administration looks to reduce the Department of Education's regulatory oversight.
- Loan servicers will update borrowers with new repayment terms, but there might be delays.
