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SAVE July 2024 Forbearance FAQ

On July 18, 2024, a federal appeals court issued a stay preventing the Department of Education (ED) from operating the Saving on a Valuable Education (SAVE) repayment plan. The Department of Education will be placing borrowers on SAVE into an interest-free forbearance starting in August 2024 while they assess the ruling and determine next steps. Months on this forbearance period will not count towards IDR forgiveness or PSLF and so will impact alumni who are currently participating in the Law School's Loan Repayment Assistance Program (LRAP). 

Below are some basic questions and answers about the July 2024 SAVE forbearance and how it interacts with LRAP. We recommend following any updates from the Department of Education at studentaid.gov.

ED FAQ - I am enrolled in the SAVE Plan. What does the July 2024 administrative stay mean for me?

You are being placed into a forbearance because your servicer is not currently able to bill you at the amount required by a recent court order. The court order is preventing ED from offering the SAVE Plan while litigation continues.

During forbearance, borrowers are not required to make payments. Interest will not accrue during this forbearance. Time spent in this forbearance does not count for Public Service Loan Forgiveness (PSLF) or income-driven repayment (IDR) plan forgiveness.

Borrowers will be in this forbearance until the legal situation changes or servicers are able to send bills to borrowers at the appropriate monthly payment amount.

Borrowers, and employers on borrowers’ behalf, can make a payment during the forbearance. That payment will be applied to future bills due after the forbearance ends.

Borrowers who do not want to be in this forbearance can contact their servicer to change repayment plans. There will still be forbearance associated with changing to certain repayment plans. See below for more information.

If you are nearing the end of your time on PSLF, please see additional information below.

ED FAQ - I want to enroll in the SAVE Plan or another income-driven repayment (IDR plan) or consolidate my loans. What do the recent July 2024 court rulings mean for me?

Borrowers may apply for IDR plans and/or consolidate loans by submitting a PDF application to your servicer by uploading it to your servicer’s web site or mailing or faxing it to your servicer. Due to the stay, the online IDR and consolidation loan applications on StudentAid.gov are temporarily unavailable. We will let borrowers know when the online IDR and consolidation applications become available.

Borrowers may apply for the following income-driven repayment (IDR) plans: Pay As You Earn (PAYE), SAVE (previously known as REPAYE), and Income-Based Repayment (IBR). Note that Income-Contingent Repayment (ICR) does not qualify for LRAP. We encourage borrowers to review the specifics of each IDR plan in order to make the best choices for their circumstances. For example, if a borrower enrolls in an IBR Plan and then moves to a different repayment plan, accrued and unpaid interest will capitalize (be added to the principal balance).

Borrowers are still permitted to apply for the SAVE/REPAYE Plan even though some of its provisions have been stayed. The terms of the SAVE/REPAYE Plan are subject to the outcome of ongoing litigation.

Borrowers should note that, as a result of the administrative stay, servicers have temporarily paused processing of IDR applications until we can ensure applications are processed correctly. Borrowers should expect a lengthy delay in processing of applications, especially for borrowers applying for SAVE/REPAYE. We do not currently have an estimate of how long this will take. Borrowers should check back for updates.

Finally, once applications are processed, borrowers who are enrolled in the SAVE Plan may be placed in forbearance if litigation remains ongoing or if servicers can’t calculate payments at the amounts required by court orders.

ED FAQ - Is there any way for me to receive credit towards Public Service Loan Forgiveness (PSLF) during this time (the July 2024 court stay)?

Although the forbearance does not count toward PSLF, there are currently two ways borrowers may be able to receive PSLF credit for this time. Borrowers should review these options closely before taking any action.

Enroll in a different IDR plan

Borrowers can apply to enroll in a different IDR plan. We encourage borrowers to look at the specific terms of each IDR plan to make the best choice for their individual situation. Please see the previous FAQ for more information. Different IDR plans may require higher monthly payments than the SAVE/REPAYE Plan does, and—in the case of some IDR plans—borrowers who later leave them may face interest capitalization (where unpaid interest is added to the principal balance). However, payments made under these IDR plans will count toward forgiveness under IDR and PSLF. As noted above, servicers have temporarily paused processing of applications to enroll in a new or different IDR plan until we can ensure applications are processed correctly.

Buy Back Credit

Some borrowers may be eligible to “buy back” months of PSLF credit for time spent in forbearance as a result of the court’s administrative stay. Currently, borrowers with 120 months of eligible employment can make payments to cover past months that were not counted as qualifying payments because the borrower was in an ineligible deferment or forbearance status. Borrowers must submit a buyback request and make an extra payment of at least as much as what they would have owed under an income-driven repayment (IDR) plan during the months they are trying to buy back.

Borrowers can buy back these months only if:

  • they still have an outstanding balance on their loan(s),

  • they have approved qualifying employment for these same months, and

  • buying back these months will complete their total of 120 qualifying PSLF payments

The buyback opportunity is only available to you if you already have 120 months of qualifying employment and buying back months in forbearance or deferment would result in forgiveness under PSLF. This credit buyback IS NOT AN OPTION for recent graduates.

Eligible borrowers can find more information on the buyback option on the Federal Student Aid website.

UChi LRAP FAQ - How does the July 2024 SAVE court stay impact my remaining 2024 calendar year LRAP benefits?

The court stay and subsequent required SAVE forbearance means that if you were repaying your loans on SAVE, you are not eligible for the LRAP benefits you have received for August 2024 onwards due to not having a required payment on your student loans. UChicago Law has determined that this SAVE forbearance is different than the COVID payment pause because this forbearance is not being applied across all borrowers. 

UChi LRAP FAQ - What are my options regarding my LRAP benefits during the July 2024 SAVE court stay and required forbearance?

Alumni participating in LRAP who are repaying on the SAVE plan have a few options based on whether they plan to participate in LRAP during the 2025 calendar year or not. Unfortunately, we do not know how long this forbearance will last but for the purposes of these options, we are assuming payments for those on SAVE will not restart until 2025.

Read on for information regarding options for your August 2024 through December 2024 LRAP benefits. We will send an email to our impacted LRAP participants about these options but please contact the Financial Aid Office at financialaid@law.uchicago.edu with any questions.

You will be participating in LRAP in the 2025 calendar year

  1. You can set aside your August 2024 through December 2024 LRAP funding to apply towards future IDR payments. When you apply for LRAP for 2025, UChicago Law will reduce your calculated 2025 LRAP benefit by the amount of your documented August 2024 through December 2024 monthly SAVE payment amount.
  2. You can return your August 2024 through December 2024 LRAP funding to UChicago Law. In this case, your 2025 LRAP benefit will not be prorated as long as UChicago Law has received your full August 2024 to December 2024 LRAP funding.
  3. You can submit an appeal to the LRAP Committee to request that you be allowed to apply your August 2024 through December 2024 LRAP benefits towards your eligible UChicago Law School loans. In this case, you understand that:
    • These months will count against your LRAP eligibility
    • These payments will not move you closer towards PSLF
    • The LRAP Committee must approve this option. If they do not, your 2025 LRAP benefit will be reduced by the amount of your documented August 2024 through December 2024 monthly SAVE repayment amount.

You WILL NOT be participating in LRAP in the 2025 calendar year

  1. You can return your August 2024 through December 2024 LRAP funding to UChicago Law. In this case, your potential future LRAP benefit eligibility will not be impacted as long as UChicago Law has received your full August 2024 to December 2024 LRAP funding.
  2. You can submit an appeal to the LRAP Committee to request that you be able to apply your August 2024 through December 2024 LRAP benefits towards your eligible UChicago Law School loans. In this case, you understand that:
    • These months will count against your overall LRAP eligibility
    • These payments will not move you closer towards PSLF
    • The LRAP Committee must approve this option. If they do not and you do not return your August 2024 through December 2024 LRAP funding to UChicago, you will forfeit future LRAP eligibility.

UChi LRAP FAQ - Can I switch to another IDR plan and maintain my LRAP benefits?

Yes, you can switch to another IDR plan (except for ICR, which doesn't qualify for LRAP), but there are a few items to consider.

The Department of Education (ED) has said in their SAVE forbearance FAQ (noted above) that borrowers can apply for PAYE but our understanding is that PAYE enrollment is limited as of July 1, 2024. Therefore, IBR is most likely the only other IDR option available for LRAP recipients. Additionally, ED is not currently allowing borrowers to apply for an IDR plan online and borrowers must submit a PDF IDR application to their servicer. Finally, ED has confirmed that plan switches may take some time to be processed as servicers have temporarily paused processing of IDR applications.

Since LRAP recipients are eligible for LRAP benefits for any months during which you are not enrolled in a qualifying payment plan, it may make more sense to remain in the forbearance and save your August 2024 through December 2024 LRAP benefits for future payments, at least for the time being to see how this all plays out. The important thing is to set aside your August 2024 through December 2024 LRAP benefits so that they remain available for future payments, unless you choose to return the funding to UChicago Law.

Now that the 2024 LRAP application deadline has passed, UChicago Law cannot guarantee that we will be able to fund the difference between your SAVE monthly payment amount and your IBR monthly payment amount, should you choose to switch to IBR.

UChi LRAP FAQ - When do I need to make a decision on what I'm doing with my August 2024 through December 2024 LRAP benefits?

At this time, UChicago Law does not know how long the SAVE forbearance will last. Given this, we will not require that alumni make a decision on this until October 2024 at the earliest, when the 2025 LRAP Application is set to be available. We hope to have more information from the Department of Education at that time regarding the length of the SAVE forbearance.

For now, we strongly encourage alumni to set aside their August 2024 through December 2024 LRAP funding while we all await more information. 

Where can I find additional information about the July 2024 SAVE court stay?

Additional information about the July 2024 SAVE court stays can be found on studentaid.gov.