An expert predicts that the Biden administration's student loan relief plan could be put on hold for an extended period of time, possibly lasting several months or even a year.

• The SAVE plan, which is the Biden administration's affordable repayment plan, may face legal challenges and could be put on hold for several months or more.
• Here's what borrowers should know in the meantime.

The SAVE plan, which is the new affordable repayment plan from the Biden administration, may face legal challenges and could be put on hold for an extended period of time.

Approximately 8 million individuals are enrolled in the Saving on a Valuable Education (SAVE) program, according to the White House.

Here are a few things that borrowers need to know.

Why the SAVE plan is on hold

The SAVE plan has been a source of controversy since its introduction by the Biden administration in the summer of 2023, with it being described as the "most affordable student loan plan ever."

The new income-driven repayment plan is the most generous to date.

The SAVE plan has two key provisions that legal challenges have targeted: lower monthly payments and quicker debt erasure for those with small balances.

The U.S. Department of Education is being sued by Republican-led states over the SAVE program, with the states arguing that the agency is exceeding its authority and attempting to indirectly forgive student debt, following the Supreme Court's rejection of its broad plan in June 2023.

The Education Department had already forgiven $5.5 billion in student debt for 414,000 borrowers through the SAVE plan before the legal challenges.

Experts say that those who have already received relief are not affected by any pause in the plan.

Payments are not due for now

Millions of borrowers in the SAVE program have their federal student loan payments paused, as the Biden administration defends its relief program in court.

The Education Department has put these borrowers on administrative forbearance, which suspends the accrual of interest, just like during the Covid-era payment pause.

"Mark Kantrowitz, a higher education expert, stated that it is challenging to determine the duration of the forbearance, which could range from several months to a year."

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The Supreme Court may eventually rule on the legality of the plan, potentially increasing the delays.

No credit toward forgiveness

Unlike other payment pauses on student loans, the months during this forbearance will not be considered towards borrowers' timeline to loan forgiveness.

Individuals enrolled in SAVE who aspire to have their debt forgiven through the income-driven repayment plan or Public Service Loan Forgiveness are not receiving credit for the time they are not making payments.

Students seeking loan forgiveness should still investigate their options, advised Elaine Rubin, director of communications at Edvisors, a platform that assists students in managing college expenses and debt.

The Education Department provides a buyback option for borrowers pursuing PSLF who may have missed payments. This option allows borrowers to receive credit for previous months by retroactively making payments, according to Rubin.

To avoid losing credit for the months spent in forbearance, borrowers may want to consider switching to a different income-driven repayment plan, advised Rubin.

"She stated that transitioning between repayment plans may take several months, with some borrowers reporting that their servicers informed them it could take up to 90 days."

Even though they're not getting closer to debt forgiveness, SAVE enrollees are still benefiting from $0 monthly payments, Kantrowitz noted.

He stated that borrowers do not lose anything other than time during the pause.