The Good News on Student Loans!
Have you heard about the Saving on a Valuable Education (SAVE) Plan? It is the part of the Biden student loan relief package that was not eliminated by the Supreme Court. Although the official start date of the SAVE plan is July 1, 2024, there are parts that go into effect this summer that will lower monthly student loan payments immediately.
For those of you on an Income Repayment Plan, the SAVE Plan replaces the existing REPAYE plan, so if you are in the REPAYE plan you will be automatically enrolled in the SAVE plan. If you are not enrolled in the REPAYE plan, you may want to explore the new SAVE plan to see if it makes sense to switch your repayment plan. The SAVE plan is available to all direct student loan borrowers who have Direct and FFEL Loans.
The SAVE plan will roll out in two parts over the next 12 months. See the details below.
These benefits go into effect this summer!
These remaining benefits go into effect on July 1, 2024.
Click here to view the Department of Education’s fact sheet on the new SAVE Plan for the complete list of details on the plan.
Monthly payments will begin this October, so now is the time to review your current situation and adjust to optimize your student loan repayment. Picking the right student loan repayment strategy depends on your unique circumstances. Below are a few important considerations that could impact your wallet.
Recertify Income– You will have until March 1, 2024, to recertify your income. Figuring out if it makes sense to recertify now or delay can save you money. In general, if your payments would decrease then recertify now and if your payments would increase then delay as long as possible.
Repayment Plan-Reevaluate the repayment plans. Your circumstances may have changed since forbearance began in 2020. Perhaps your income and/or dependents have changed. There may be a more suitable repayment plan. Also, with the new Biden student loan relief package some income repayment plans will no longer be available for enrollment after July 1, 2024. So, you may want to get in now while you can.
Tax Filing Status– Now is a good time to crunch the numbers with your tax professional to get a plan for the 2023 tax year. With the new SAVE Plan allowing couples to exclude spousal income, it may make financial sense to take advantage of this feature.
While the loan forgiveness piece of the Biden student loan relief package was eliminated, if you have a Direct Loan or FFEL loan, investigate the SAVE Plan to see if you can benefit from lower monthly payments! If you need help fitting student loan payments into your budget or deciding which repayment plan is best for you, please reach out, we can help.