The three-year pause on federal student loan payments imposed as a COVID-19 relief measure is over, and the bills started coming due again in October 2023. A Biden Administration plan to forgive billions in student debt went down in flames at the Supreme Court.

That's not the end of the story. The White House has unveiled new programs that help distressed borrowers lower their monthly payments to a reasonable level. Even student loan forgiveness is still possible for some public service employees, non-profit workers, and disabled people.

Federal Student Loan Forbearance Ends

The Coronavirus Aid, Relief and Economic Security (CARES) Act granted federal student loan borrowers automatic forbearance for loans owned by the U.S. Department of Education. The pause on repayments, originally passed on March 13, 2020, was extended repeatedly and finally expired on Oct. 1, 2023.

Interest charges began accruing on Sept. 1, 2023, and the monthly bills started going out again in October.

The loan forbearance program meant:

• Your interest rate was 0%.
• You didn't have to make payments.
• You weren't charged any late fees.
• Interest didn't accrue.
• The interest you owed on March 12, 2020, was not added to your principal balance.
• You didn't have to contact your loan servicer to request these benefits if you were eligible for them.

The Saving on a Valuable Education (SAVE) Plan

Thwarted by the Supreme Court ruling against a massive student loan forgiveness program, the Biden-Harris administration immediately rolled out their next strategy for student loan relief—the Saving on a Valuable Education (SAVE) plan. The SAVE plan is an income-driven repayment (IDR) plan that promises to lower or eliminate loan payments depending on your discretionary income.

Benefits for Borrowers

The SAVE plan is open to anyone with an eligible loan. While similar to last year's Revised Pay As You Earn (REPAYE) plan, the SAVE plan has additional benefits and is more widely available. People who enrolled in REPAYE will automatically be added to SAVE. The plan will:

• Reduce the percent of discretionary income used to determine loan payments: The REPAYE plan required payments of 10% of discretionary income on undergraduate loans. The SAVE plan lowers that to 5%. For borrowers with both undergraduate and graduate loans, the amount will be a weighted average between 5% and 10%.
• Adjust what counts as discretionary income: On prior plans, discretionary income was 150% of their adjusted gross income over the federal poverty guidelines. The SAVE plan raises the income limit to 225% of the poverty guidelines, making the plan accessible to many more borrowers. For some borrowers, their monthly payments will be $0. For those making more, the government expects most borrowers to save up to $1,000 per year.
• Forgive some loan interest. For example, if your loan payment is $25 monthly, but your loan accrues $35 in interest, the additional $10 will not be added to your balance. For borrowers making extremely low payments, this means their loan amount will not grow as long as they are making payments.
• Forgive some payments: While prior programs expected 20 years of payment before forgiveness, the SAVE plan lowers this threshold for low-balance borrowers. If your original loan amount was under $12,000, loans can be forgiven after 120 qualifying payments. Each $1,000 over that amount requires 12 additional payments, with undergraduate loans capping out at 20 years and graduate loans at 25 years. If loans were consolidated, payments made before consolidation count towards the payment total.

SAVE Loan Eligibility

Since the SAVE plan is a federal program, only the following loans are eligible:

• Direct subsidized loans
• Direct unsubsidized loans
• Direct PLUS loans for graduate and professional students
• Direct consolidation loans that did not repay PLUS loans made to parents

Other loans may be eligible if first consolidated into a direct consolidation loan. Loans made to parents for their children or loans in default are not eligible for the program.

Timeline and How to Apply

The SAVE plan is available now. Borrowers who are currently signed up for the REPAYE program will be automatically transferred to the SAVE plan. Anyone else eligible can apply immediately.

The application is available online at , and it takes roughly 10 minutes to fill out. To apply, log into StudentAid.gov. You'll need your financial information, personal information, and your spouse's information if married filing jointly.

Other Student Loan Relief Programs

Despite the Supreme Court decision, student loan forgiveness is still available to certain people in certain circumstances. Those most likely to be eligible include teachers and other public service employees, workers at non-profit organizations, and disabled people.

• Public Service Loan Forgiveness: The PSLF program offers loan forgiveness after 10 years of payment for borrowers who work in a field that benefits their community, such as healthcare, fire departments, social work, or government agencies.
• Income-Based Repayment: IBR allows qualifying borrowers, regardless of industry, the opportunity to pay 10%–15% of their discretionary income in payments. They are eligible for forgiveness after 20 or 25 years.
• Teacher Loan Forgiveness: If you have been a full-time elementary or secondary teacher for at least five years in a low-income school, you may qualify for up to $5,000 in loan forgiveness. Math and science teachers may qualify for up to $17,500.
  

Check Your State's Website for Relief Options

Visit your state's website to see what student loan relief options lenders are providing where you live. Depending on your industry, you may be eligible for state-funded relief.

You can visit your loan servicer's website to see what options they're offering all borrowers, and you can also call or email your loan servicer to find out what specific options may be available to you, given your circumstances.

Besides the possibilities described above, you may also be able to request economic hardship or unemployment deferment. You may also be able to get a temporary reduction in your interest rate or a loan modification.

The Bottom Line

Student loan forbearance was one of the longest-lasting pandemic-relief measures, but it ended for good in October 2023. If you are having trouble meeting your student loan commitments, consider applying for relief through the SAVE program. It can lower your monthly bill to a manageable level.