SAVE Plan is Dead

Financial Clarity for Doctors tackles some student loan updates with hosts Rachelle Vanderzanden and Corey Janoff.  On December 10th, the Department of Education proposed a settlement in the case challenging the SAVE plan and agreeing to dismantle the payment plan (pending court approval, so maybe not officially dead).  What does that mean for the seven million borrowers still enrolled in the plan? 

Next steps for SAVE plan participants: 

• Most folks will likely need to apply to move into a new income-driven payment plan or move into a Standard repayment plan. 

• This means recertifying income and enrolling in one of the remaining plans.  Currently, those options are IBR, ICR, or PAYE with the new RAP plan being rolled out this coming summer. 

• If the goal is to work toward Public Service Loan Forgiveness (PSLF), you will likely want to enroll in the plan that equals the lowest payment. 

• When you reach 120 months of qualifying employment, you can look into the “Buyback” program to see if you can make payments from your time in forbearance. 

• If the goal is not PSLF, you can explore lots of options, payment plans, and even refinancing.  Although move slowly with refinancing!  Moving to a private bank has some downsides. 

As with everything, your student loan approach should be determined based on your goals and needs.  Any strategy (including loan repayment) depends on the specifics of your situation.  If needed, consult with a professional to try to find the best strategy for your loans.  They were an investment in your future!   But we don’t want them hanging over your head forever. 

For more financial planning tips from Corey and Rachelle, find them on social media! 
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance  

 

Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Finity Group, LLC and Cambridge are not affiliated. Cambridge does not offer tax or legal advice.