Launched in the summer of 2023 by the Biden administration, Student Aid Valuation Effort (SAVE) has been hailed as the most accessible and generous student loan repayment strategy to date. It offers unprecedented low monthly payments and faster loan forgiveness for qualified small balance holders.
The program has faced legal scrutiny, however. Several Republican-led states have filed lawsuits against the U.S. Department of Education, arguing that the department exceeded its authority with the SAVE plan. These legal challenges arose in the wake of a June 2023 Supreme Court decision that blocked a more comprehensive debt relief strategy proposed by the administration.
Despite these challenges, the Department of Education had already canceled approximately $5.5 billion in student loans for more than 414,000 applicants under the SAVE program before the legal resistance began.
Experts confirm that those who have already received debt relief through SAVE will not see their benefits canceled while the program is suspended. Currently, no payments are required to recipients, but the grace period will not count toward eligibility for loan forgiveness under other programs such as Public Service Loan Forgiveness (PSLF).
Elaine Rubin, director of corporate communications at Edvisors, advises borrowers to carefully weigh their options. The Department of Education is offering a buyback opportunity for those in PSLF who may have missed payments, allowing them to regain eligibility by making retroactive payments.
Rubin also suggests that borrowers who want to continue accumulating credit for loan forgiveness may need to switch to an alternative income-based repayment plan, though he cautions that such transitions could take up to 90 days, as reported by some loan servicers.
Student loan expert Mark Kantrowitz notes that SAVE program participants currently have a $0 monthly payment requirement. He points out, “The only downside to borrowers during this pause is the loss of time, not the financial benefits.”
This ongoing situation highlights the complexity of the student loan policy landscape and the legal and administrative hurdles they face.
