There are some things that will be coming out due to this decision that everyone should be aware of:
- Servicers are being instructed to provide borrowers a 3-month “grace” or “safety net” period during which borrowers will not be treated as delinquent if they miss payments (though interest will continue to accrue). That 3-month period may be extended.
- The Administration plans to release the new income-driven repayment (IDR) regulations “in the coming weeks and then “swiftly implement” them.
- Whereas the proposed regulations centered around revising the current REPAYE plan and leaving the name in tact (leading some of us to refer to it as “revised-Revised Pay As You Earn”), the admin now plans to rename the plan SAVE, for Saving on a Valuable Education. The reporting isn’t totally clear, but I expect and hope the administration will fully replace existing REPAYE with the new SAVE plan, so that borrowers already enrolled in REPAYE would automatically be enrolled in SAVE (which offers some big advantages compared to existing REPAYE) without having to switch plans.
If you schedule a consultation with us, we’ll be able to point you in the right direction without you having to learn all of the old, the new and about to be changed things out there. It’s a bit of a minefield, but we are seeing large swaths of loans finally being written off under PSLF, Borrower Defense, and our TPD work for clients with medical issues that prevent them from working much. And we’ll begin to see the one time account adjustment work its magic this fall!