Earlier this summer, I posted about moving onto the SAVE plan and how that was to decrease our monthly student loan payment. Our student loan servicer, Aidvantage, was also going to apply the one-time payment count adjustment so that we’d know how many years we are still expected to pay on the loan until it is forgiven. (Under some plans without Public Student Loan Forgiveness, people pay towards the loan for 20 years [for undergrad degrees] and 25 years [for grad degrees]).
I had just submitted our 2023 taxes and asked that they be used to calculate our payment instead of our 2022 taxes. Since we had a lower AGI in 2023 than 2022, our payments went from $528 to $391 a month.
I was excited for the lower payment amount but even more excited to know how many years we had left to pay.
Before we were able to make even 1 payment of $391, though, the courts halted the whole SAVE plan for everyone. My understanding is that Biden passed the plan under executive order instead of going through the process to make it law, then 6 states sued sued, and while this is going through the courts, everyone on the SAVE plan is in forbearance.
When we had forbearance during Covid, we didn’t have to make any payments, interest did not accrue, and we got credit (time credit) as if we had made a payment. This was great from a student loan payment perspective. We got credit for paying $0.
During this pause, people who are on the SAVE plan are not required to make payments, and since the SAVE plan may be changed or repealed, making payments may not even be beneficial. The other two benefits of the Covid forbearance are in question for this forbearance. In the few short weeks since the courts halted the SAVE plan, I have heard that interest would (and would not) accrue, we’d get credit (and not get credit) for time that passed during the pause. If there is a set answer about the interest and payment counts during this pause, I can’t find it.
Before any of this happened, though, I was working on another problem. In the beginning of June, our interest went up from being about $17 a day to $55 a day. Through much communication with Aidvantage, I found out that the $55 a day interest is correct. They just hadn’t done the calculations until about 4 months after we had been put on the SAVE plan.
I would have liked to have known that the interest of $17 wasn’t correct, but I didn’t. I didn’t go through the whole process of figuring out how the 7.25% interest was applied until our interest had seemingly magically increased. I was on the phone with Aidvantage when I finally figured out the calculation myself. I kept doing the calculations and coming up with the wrong answer so I called and asked what I was doing wrong. The person I was talking to had to ask her supervisor; I was pretty proud of myself that as an English major, I can still do math.
So it’s a waiting game, again. If the courts abolish SAVE, there will be other plans. Our next president may make changes that are more or less favorable.
I did find a template of a letter to send to my congress people and senators. I need to look it over, revise it to add our experience with loans and then send it. I rarely do anything more than vote and sign petitions, so I think sending an email will be a good exercise for me. Along with keeping an eye on how things turn out for student loan legislation, that’s the best I can do for now.
Peace Out (and In),
~Julie
(photos of wildflowers in Colorado)
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