SAVE Plan Termination Forces Seven Million Borrowers Into Application Backlogs

Borrowers who fail to apply to switch from the terminating SAVE plan to another income-driven repayment plan will be placed in a Standard repayment plan, potentially resulting in unaffordable monthly payments. The Education Department will terminate the SAVE plan this summer following a settlement agreement with Republican-led state challengers. More than seven million borrowers are currently enrolled in the SAVE plan and must affirmatively apply to switch plans within 90 days. The department's current processing capacity is strained. By the end of March, the application backlog for income-driven repayment plans stood at 553,966. The backlog for PSLF Buyback applications grew to 89,720 by the end of March, as the department processed 3,280 requests in March while receiving 4,660 new applications. Total application backlogs for repayment plans and loan forgiveness currently exceed 643,000. This summer, the department will launch the Repayment Assistance Plan (RAP). If millions of federal student loan borrowers submit new applications, existing backlogs will balloon.