7 Million SAVE Borrowers Must Switch Plans as Monthly Bills Could Jump by $200
Updated
Updated · WCVB Boston · Jun 25
7 Million SAVE Borrowers Must Switch Plans as Monthly Bills Could Jump by $200
3 articles · Updated · WCVB Boston · Jun 25
Summary
Starting July 1, more than 7 million federal student loan borrowers on the defunct SAVE plan will begin hearing from servicers about moving to a new repayment option.
Monthly costs could rise sharply: a family of four earning $120,000 with $60,000 in loans might see payments climb from about $430 under SAVE to roughly $630-$850 on income-based repayment.
Betsy Mayotte of the Institute of Student Loan Advisors said borrowers should first determine whether they qualify for forgiveness, then compare eligible plans with tools such as the Federal Student Aid Loan Simulator.
Processing a new plan can take days to weeks, followed by a 30- to 45-day disclosure period before the first bill is due; borrowers who do nothing risk landing in Standard or Tiered Standard plans.
Mayotte also warned that unnecessary consolidation can cut off current plan options and reset forgiveness progress, while default can trigger wage garnishment, collection costs and credit damage.