{"id":6119,"date":"2024-10-11T16:42:19","date_gmt":"2024-10-11T16:42:19","guid":{"rendered":"https:\/\/finderica.com\/idr-applications-are-open-again-should-you-switch-from-the-save-plan\/"},"modified":"2024-10-11T16:42:19","modified_gmt":"2024-10-11T16:42:19","slug":"idr-applications-are-open-again-should-you-switch-from-the-save-plan","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=6119","title":{"rendered":"IDR Applications Are Open Again, Should You Switch From The SAVE Plan?"},"content":{"rendered":"\n
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WASHINGTON, DC – OCTOBER 05: U.S. President Joe Biden speaks to the media before he departs the … [+]<\/span> White House on October 05, 2024 in Washington, DC. President Biden and the First Lady are heading to South Bend, Indiana to attend a wedding this afternoon and will spend the night at Camp David. (Photo by Tasos Katopodis\/Getty Images)<\/span><\/p>\n

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With the Saving On A Valuable Education (SAVE) income-driven repayment plan for student loans on pause while its legality is debated in the courts, many borrowers with federal student loans don’t know what to do next.<\/p>\n

Those on the SAVE plan are currently in forbearance at the direction of the Biden administration, and no payments are due and interest won’t accrue during this time. That’s a silver lining of sorts for some, but there are downsides that come with paused payments due to SAVE plan federal court action.<\/p>\n

For example, this forbearance period won’t count for borrowers on the plan who are pursuing Public Service Loan Forgiveness (PSLF) by making payments on an eligible plan while working in an eligible public service position for 10 years (120 months).<\/p>\n

This time in forbearance also won’t count toward forgiveness through the SAVE plan itself, either.<\/p>\n

For these reasons and others, it’s easy to see why some borrowers might want to switch from the SAVE plan instead of waiting to hear a decision from the courts. But, should they? For the most part, borrowers should carefully consider the pros and cons before they decide.<\/p>\n

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Most Borrowers Should Stick With The SAVE Plan<\/h2>\n

Despite the uncertainty around the future of the SAVE plan, most borrowers should probably stay the course.<\/p>\n

Financial advisor Jason Dall\u2019Acqua of Crest Wealth Advisors<\/a> says that the current situation with the SAVE plan could actually be a boon for some borrower’s finances. With no monthly payments due and no interest accruing, cash-strapped consumers could use the money they save to cover living expenses or pay down high-interest consumer debt.<\/p>\n

Abby Wernicki, Ph.D., who serves as senior director of admissions at Colorado State University Global, has some advice for borrowers who aren’t necessarily struggling financially as well \u2014 consider setting aside loan payment amounts in a separate savings account for the future.<\/p>\n

“This means they\u2019ll be well positioned to begin making payments once their accounts are moved back into repayment, whether they decide to stay in the SAVE plan or switch to an alternative income-driven repayment plan,” she says.<\/p>\n

Borrowers pursuing PSLF requirements who are close to reaching the threshold will also have the option to “buy back” PSLF credits<\/a> they missed at some point. This means the time spent in SAVE forbearance doesn’t necessarily have to derail their progress toward loan forgiveness.<\/p>\n

According to the U.S. Department of Education, being able to buy back PSLF credits becomes an option when borrowers spend time in an ineligible deferment or forbearance status. In order to buy back credits for PSLF in the future, you must also:<\/p>\n