Student loan borrowers exiting the SAVE program face higher payments. The program is called SAVE. The government gave it that name because calling it "temporary financial procrastination with compound interest" wouldn't poll well with people who think a 529 plan is a new iPhone model.
Millions of borrowers need to pick a new repayment plan or their monthly bills will increase. This is shocking news to anyone who believed federal student loans were actually surprise grants that dissolve if you ignore them long enough.
The borrowers have to take action soon. Soon means now. Now means they already missed the email because it went to spam between a LinkedIn request from a life coach and an ad for brain supplements.
Here's what happens if they don't act. Their payments jump to whatever the standard repayment calculation determines. Math gets involved. The same math they avoided by majoring in communications.
The government offers income-driven repayment plans as an alternative. These plans calculate payments based on earnings. For borrowers making minimum wage with a master's degree in nonprofit management, this comes out to roughly seven dollars per month and a lingering sense that their guidance counselor lied about everything.
The SAVE plan itself is currently blocked in court. Federal judges decided they should weigh in on loan forgiveness programs. This makes sense because judges famously struggle with their own student debt from law school and can relate to the common man.
Borrowers who do nothing will default to standard repayment. Standard means the loan gets paid off in ten years like it was originally designed to work. What a f*cking nightmare that would be.
The Department of Education sent multiple notices. They sent emails. They updated the website. They did everything except show up at apartments and physically stop people from financing another Door Dash order they'll eat alone while scrolling TikTok financial advice from a teenager in a rented Camry.
Photo by Mathieu Stern on Unsplash
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