These Student Loan Borrowers Will Have to Resume Payments For The First Time In Nearly 6 Years

Core Insights - Millions of borrowers on the Saving for a Valuable Education (SAVE) repayment plan will soon need to make payments for the first time in over a year, with some facing their first payment in almost six years [1][8] - The Department of Education is shutting down the income-driven repayment plan as part of a lawsuit settlement, requiring about 7.7 million borrowers to find a new repayment plan [1][2] Borrower Transition - Borrowers currently enrolled in the SAVE plan will have to transfer to another repayment plan, which is likely to be less generous, potentially increasing their monthly payments by $100 to $500 compared to what they would have paid under SAVE [2][3] - The transition comes after a long period of payment pauses due to the COVID-19 pandemic, during which many borrowers had $0 monthly payments and did not make payments since before the pandemic [4][6] Grace Period and Forbearance - The Biden administration announced a grace period lasting until September 30, 2024, during which payments would be due but missed payments would not immediately harm borrowers' credit or lead to default [5][6] - More than half of all borrowers on SAVE had $0 monthly payments, and many did not expect their payments to increase beyond $0 for the remainder of their loan term [6] - The Department of Education is working on transitioning borrowers out of SAVE and into another repayment plan, although no specific date has been provided for when this transition will occur [7]