Choosing the Best Student Loan Repayment Plan for Your Needs

The Education Department has reopened two repayment plans while facing legal battles over their new Saving on a Valuable Education plan, or SAVE. Republican attorneys general from Kansas and Missouri argue that President Joe Biden is trying to skirt around the Supreme Court's block on his debt cancellation plan. SAVE offers lower monthly payments and quicker debt erasure for those with smaller balances. Borrowers enrolled in SAVE are currently in interest-free forbearance, but this doesn't count towards loan forgiveness under income-driven plans or Public Service Loan Forgiveness. Experts suggest that for some, staying in the SAVE program's forbearance might be appealing. They won't have to make payments, which can be a relief during financial struggles. However, the forbearance could end, and time spent in it won't bring you closer to debt forgiveness. Higher education expert Mark Kantrowitz advises that borrowers consider their financial situation and the future of these plans before deciding. To pick the right repayment plan, it's crucial to weigh the pros and cons. Lower payments might feel good now, but could they delay your debt freedom? It's important to think about your long-term goals and how different plans might affect them.