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Student Loans Must Be Forgiven And Cannot Be Kicked Off SAVE Plan, Says Amended Lawsuit
Student loan borrowers have filed an amended lawsuit against the Education Department. They contend that qualifying SAVE plan borrowers should receive loan forgiveness or be transferred to the REPAYE plan, rather than being forced into other repayment options. This challenge arises as the department prepares to move millions of borrowers out of the SAVE plan starting in July, following a settlement that terminated both SAVE and its predecessor, REPAYE. The Education Department seeks to dismiss the lawsuit, arguing the termination is final and current law no longer authorizes these plans. Despite the legal battle, borrowers are advised to prepare for selecting new repayment plans, as the department's timeline for transitioning out of SAVE remains unchanged.
Student-loan borrowers get new timeline for leaving a key repayment plan — and some will have 'even more time'
The Trump administration confirmed the earliest date by which millions of student-loan borrowers will have to start switching repayment plans.
In a legal filing on Thursday, the Department of Education said that borrowers will not be required to move off the SAVE plan until September 29 "at the earliest."
Additionally, the department said that since it is transitioning borrowers off the plan in waves, most borrowers "will get even more time than that."
Previously, the department said that starting July 1, borrowers would begin receiving notices of their 90-day timeline to transition to a new plan, and that if they did not take action, they would automatically be placed in the most expensive plan.
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Will Private Lenders Fill the Loan Limit Gap?
Republicans who backed loan limits and slashed federal student aid are counting on private lenders to step in. Critics argue they’ll only fund students with strong credit history, limiting college access for those who are low income.
Photo illustration by Justin Morrison/Inside Higher Ed | DeanDrobot, Hemera Technologies and OlekStock/iStock/Getty Images
Private lenders have played a relatively small role in financing higher education over the last 20 years, but that’s about to change.
In Delaware, state leaders have invested $800,000 in an unconventional student lending start-up, a local news outlet reported. Meanwhile, many universities have named established companies as the preferred lenders for their students. And some colleges are developing their own lending programs—all to help close funding gaps created by new limits to federal graduate student loans, which go into effect July 1.
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