Eighth Circuit kills SAVE plan; Treasury $1.7T shift/Warren-Sanders illegal scheme Senate blast amid 7-9M defaults, Parent PLUS OBBBA $20k/yr $65k cap Jul1 rush, H.R.8009/limits, HBCU/ED purge/$1B fraud, PSLF hikes, Havens challenge, Trump FY27 ED cuts, court blocks ED data demands, DOE involuntary collections pause, IRS TIGTA $8M employee repayments
Key Questions
What happened to the SAVE student loan repayment plan?
The Eighth Circuit vacated the SAVE plan on March 10, confirming it is gone. Borrowers are transitioning to RAP/RISE plans with 90-day ED notices starting July 1, affecting 7.5-8 million borrowers.
How will monthly payments change for former SAVE borrowers?
Payments are rising sharply, such as from $54 to $644 or $326 to $2100 under new IDR plans. The Repayment Assistance Plan requires 1-10% of income contributions, leading to negative amortization and long-term costs.
What are the next steps for borrowers kicked off SAVE?
Borrowers should monitor ED notifications, consider refinancing options, and select new plans like RAP by the 90-day deadline. Failure to act may lead to default risks despite the collections pause.
Has the Department of Education paused involuntary collections?
Yes, DOE has paused involuntary collections amid the transition chaos, providing temporary protection. Treasury notes 9 million voluntary defaults with 4-5 months no garnishment via MOHELA consolidations.
What changes are coming for Parent PLUS loans?
OBBBA caps Parent PLUS at $20k/year and $65k total with grandfathering. This addresses high costs amid the July 1 rush.
What fraud issues are highlighted in student loans?
ED is purging HBCU programs over $1B in fraud. IRS TIGTA flagged $8M in employee repayments, now paused under Trump policies.
What political backlash is there against Trump policies?
Warren and Sanders called the Treasury student loan shift an 'illegal scheme.' Senate Democrats blasted the $1.7T oversight transfer amid 7-9M defaults.
What does Trump's FY27 Education budget propose?
It cuts $2.3B overall, adjusting Pell to $7395 while axing FSEOG/WS. A court also blocked ED's race/sex data demands from 17 states.
Eighth Circuit vacates SAVE 3/10 confirmed gone (7.5-8M to RAP/RISE Jul1 90-day ED notices MI/IBR; payments $54→$644/$326→$2100/PSLF crushed/neg amort/long-term IDR costs/1-10% income contribs borrower next steps); DOE pauses involuntary collections protecting amid chaos; ED notifications/refinance/$1B fraud/IRS TIGTA flags $8M employee repayments paused under Trump; Treasury 9M defaults voluntary 4-5mo no garn/MOHELA consol; OBBBA Parent PLUS cap grandfathering; Warren/Sanders Senate blast Trump Treasury shift as illegal; court blocks ED race/sex data 17 states Apr13; Trump FY27 ED -$2.3B (Pell $7395 axes FSEOG/WS).