A new legal filing is pressing the Department of Education for clarity on its transition of student-loan borrowers off a key repayment plan.
On Monday, the law firm Public Goods Practice filed a request for information in its ongoing lawsuit to restore benefits for borrowers enrolled in the Biden-era SAVE plan, which allowed for cheaper payments and a shorter timeline to debt relief.
Beginning in July, the Education Department started sending notices to the 7.5 million borrowers enrolled in SAVE, informing them of their 90-day timeframe to transition to a new repayment plan. The department said in multiple notices to borrowers that if they did not transition within their timeframe, they would automatically be placed on the standard plan, which would result in the most expensive payments.
However, since those initial notices, the timeline has shifted: after borrowers reached their 90-day deadlines, they began receiving a “final notice” granting an extra 30 days to transition. Those 30 days have now passed for some borrowers and they’re still on forbearance, with no information on new payments. The latest legal filing asked the department to provide details on what comes next.
When Public Goods Practice asked the Education Department’s counsel when borrowers would be involuntarily moved off SAVE, the counsel said, according to the legal filing, that it doesn’t “‘know when borrowers whose 30-day period has expired will be moved to new plans.'”
The Education Department has not responded to repeated requests from Business Insider on the timeline for transferring borrowers from SAVE to a standard plan. In July, the law firm filed a motion seeking to block borrowers from being involuntarily transferred off of SAVE. The department disputed the motion at the time and encouraged borrowers to enroll in “a lawful repayment option.”
Over the past few months, borrowers have been navigating President Donald Trump’s student-loan repayment overhaul, which included a new Repayment Assistance Plan. Borrowers have reported higher monthly payments under RAP, compared to SAVE, and have said they’re worried about the consequences of defaulting, like wage garnishment and seizure of federal benefits.
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