If you're enrolled or want to apply for the SAVE plan, here's what you need to know about the indefinite inbearance period.

Federal student loan borrowers can now apply online for income-driven repayment plans, including Saving on a Valuable Education, as of early October.

Despite being blocked, President Joe Biden's SAVE plan is still being contested in federal court by two multi-state lawsuits that challenge the administration's authority to implement the plan. The SAVE plan aims to reduce monthly payments and provide a new route to loan forgiveness for borrowers.

Currently, borrowers enrolled in the SAVE plan are not required to make payments as their accounts are in an interest-free forbearance, which the Department of Education expects to last at least six months while legal battles are ongoing.

In June, the Department of Education halted all income-driven repayment plan applications after the initial plan was blocked. The pause was due to the need for additional guidance from the courts on the scope of the injunctions. The previous IDR applications contained references to the SAVE plan provisions, such as the accelerated timeline to forgiveness and reduced monthly payments, which were blocked by the courts. As a result, the ED paused all IDR applications to ensure compliance with the court's ruling.

If borrowers reapply and enroll in some IDR plans, they may end up in forbearance.

Online applications reopen with caveats

The IDR application will be simplified and sent directly to borrowers' servicers after completion, but borrowers won't be able to automatically input their federal tax information. Additionally, the simplified version won't provide personalized recommendations around plan eligibility, but the ED plans to bring those features back "in the future."

ED instructed servicers to halt processing submitted IDR applications. Servicers will resume processing some of those applications in the near future, according to ED. The applications that will be resumed include:

• Income-based repayment plans
• Applications for income-contingent repayment and Pay As You Earn IDR received before July 1.
• Income-contingent repayment applications from parent borrowers submitted at any time

Borrowers will be placed in forbearance for up to 60 days while their IDR application is being processed. During this time, interest will accrue, but borrowers will be eligible to have that time count toward their Public Service Loan Forgiveness or IDR forgiveness timelines.

If borrowers' applications are not processed within 60 days, they will be placed in a general forbearance that won't contribute to loan forgiveness but will halt interest accumulation. It's uncertain if borrowers will receive notification if their application is not processed within the specified timeframe.

Borrowers who are already enrolled in the SAVE plan will remain in an interest-free forbearance period that does not contribute to PSLF or IDR forgiveness. According to an education department spokesperson, borrowers can anticipate being in forbearance for at least the next six months.

Broad student debt forgiveness remains on hold

The legal restrictions on the SAVE plan's implementation prevent the Biden administration from forgiving additional debt under the program. Prior to the legal hurdles, the administration erased $1.2 billion in debt for approximately 153,000 borrowers on the SAVE plan in February.

The SAVE plan lawsuit with the 8th Circuit Court of Appeals in Missouri is scheduled for Oct. 24, leaving the plan in limbo until then. Additionally, a lawsuit filed by Alaska, South Carolina, and Texas would be null if the Eighth Circuit rules against ED and blocks the entire SAVE plan from progressing.

The Biden administration's debt relief plan was blocked by federal courts, preventing it from being implemented. The administration had planned to enact another loan forgiveness initiative this fall, which would have affected 25 million borrowers.

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