*This post was taken from the National Association of Student Financial Aid Administrators (NASFAA) newsletter:<\/p>\n
The Department of Education (ED), in an\u00a0updated banner announcement<\/a>\u00a0on StudentAid.gov, has indicated that it has taken down the applications for income-driven repayment (IDR) plans and loan consolidation due to an injunction that continues to block the implementation of the\u00a0Saving on a Valuable Education (SAVE)<\/a>\u00a0repayment plan.<\/p>\n According to ED, the\u00a0injunction issued on February 18<\/a>\u00a0prevents the department from implementing any provision of the SAVE plan, including its monthly payment formula, as well as processing time-based loan forgiveness for the SAVE, Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans. In response, the department has disabled its online application for all the IDR plans \u2014 SAVE, PAYE, ICR, and Income-Based Repayment (IBR) \u2014 as they all exist on the same form.<\/p>\n The injunction specifically focused on the forgiveness provisions within IDR plans and said \u201cwe conclude the entire SAVE Rule must be preliminarily enjoined.\u201d Further the court argued that the lower courts mistakenly determined that the programs could function without forgiveness.<\/p>\n \u201cHere, the district court enjoined only the forgiveness provision after concluding the remainder of the rule \u2018can function sensibly\u2019 without forgiveness. We conclude otherwise,\u201d the ruling reads. \u201cAs the federal officials themselves argue, \u2018it would make little sense for an ICR plan to end in default,\u2019 which is what will happen for most borrowers enrolled in SAVE if forgiveness is enjoined while other provisions like the payment provisions remain in effect.\u201d<\/p>\n \u201cWe will continue to update\u00a0StudentAid.gov\/saveaction<\/a>\u00a0with more information,\u201d Federal Student Aid (FSA) noted in its announcement.<\/p>\n What We Know<\/strong><\/p>\n The removal of these applications impacts both borrowers newly entering repayment and seeking an income-driven repayment plan, and borrowers already in repayment who would like to switch into an IDR repayment plan. It also impacts those seeking loan consolidation, since the consolidation application is embedded in the IDR online application.<\/p>\n