News & Updates

Latest updates related to the SAVE plan litigation and IDR applications and recertifications:

IDR applications

The online and PDF applications for Income-Driven Repayment are available. You can apply for a plan for the first time, recertify or recalculate your existing plan, or switch to a different plan. However, loan servicers are not processing any IDR applications right now. If you are trying to enroll in or switch IDR plans, you should be in a processing forbearance that counts for PSLF for up to 60 days. If loan servicer doesn’t do this automatically, give them a call. Afterwards, you may be moved into an extended forbearance that doesn’t count for PSLF. If you are seeking LRAP funding but are in forbearance, wait to apply for LRAP until your forbearance ends or submit an LRAP prequalification application instead.

IDR options

SAVE

If you are enrolled or want to enroll in SAVE, you will be placed in an interest-free forbearance with no payments due. This forbearance will not count toward PSLF or IDR forgiveness unless you apply for the buyback at the time you’re due for forgiveness. This forbearance is expected to last at least another six months. We do not expect SAVE to survive litigation and/or a new administration.

Pros:

• If you are struggling to make payments, you may want to be in forbearance.

Cons:

• Not making progress toward PSLF forgiveness right now can be disheartening. You’ll have to rely on the buyback program, which is relatively new and untested, and theoretically, could get taken away someday. You cannot get 20-25 IDR forgiveness under SAVE right now (you can get PSLF). We’re hearing that some folks wanting to obtain a mortgage are having trouble while their loans are in forbearance. If you’re making a big purchase, check with your lender about whether this is a problem.

IBR

IBR enrollments are open and will be processed soon.

Pros:

• You’ll be making progress toward PSLF and 20-25 year IDR forgiveness, and can receive forgiveness under both of these programs during litigation.
• IBR is the only statutory repayment plan, so it will not be changed or overturned by litigation. Thus, it’s unlikely you’ll be forced to change plans in the future.

Cons:

• For borrowers who borrowed loans for the first time before July 1, 2024, IBR is less generous than SAVE and PAYE.
• Switching out of IBR (if, for instance, you’d rather join a different plan after litigation ends) can be onerous. It requires you to enter a one-month forbearance (doesn’t count for PSLF) and results in unpaid interest being capitalized.

PAYE

PAYE enrollments will open in mid-December.

Pros:

• You’ll be making progress toward PSLF and IDR forgiveness. However, you cannot receive 20-year IDR forgiveness under PAYE while litigation is ongoing.

Cons:

• PAYE can be overturned or phased out more easily than IBR.

ICR

ICR enrollments will open in mid-December.

Pros:

• You’ll be making progress toward PSLF and IDR forgiveness. However, you cannot receive 25-year IDR forgiveness under ICR while litigation is ongoing.

Cons:

• ICR has a less generous formula than IBR and PAYE. It is the least generous IDR plan an is typically not recommended unless it is the only plan you’re eligible for.

• ICR can be overturned or phased out more easily than IBR.

“Lowest monthly payment”

If you select “lowest monthly payment” or “let my servicer choose” in the IDR application, this is functionally the same thing as selecting SAVE.

IDR recertification

You never need to update your income for your IDR plan until you are asked by your servicer. If you are due to recertify your IDR plan before 2/1/25, it will be extended a year. Here’s how to check your IDR end date:

• Log into studentaid.gov
  • In the My Aid dashboard, click View Details
  • Scroll to the bottom of the page. Expand your Dept of Ed loans (View Loans)
  • For one of your loans, click View Loan Details
  • Look at the IDR Anniversary Date
• Log into your loan servicer’s website.
  • Go to More –> Tools & Requests 
  • Download your Printable Account Information
  • Check your plan Schedule End Date

LRAP implications

In an LRAP contract

If you’re in an LRAP contract right now and enrolled in SAVE, you may not use all of your LRAP funds. That’s ok–you can return excess funds to UC Berkeley via the LRAP forgiveness and billing back process, which happens when your contract ends. You are welcome to use your LRAP funds to make payments even if nothing is due (to avoid repaying LRAP funds), but this doesn’t make a ton of sense if your loan balance is large and you’re pursuing PSLF. 

Submitted an LRAP application

If you have a pending LRAP application with us, we will contact you separately. If you are enrolled in SAVE, we’ll either close out your application and have you apply next year when you have a payment due, or you can switch IDR plans and continue with your LRAP application now.

Planning to join LRAP soon

If you’re planning on joining LRAP, please do not apply until you have a payment due. If you’re enrolled in SAVE, that means you won’t need to apply until sometime next year. If you’re switching plans, wait until your new plan is approved to apply for LRAP. We just don’t know how long it’ll take servicers to process IDR applications.

If you’re approaching your 3.5 year LRAP deadline and still don’t have a payment due, just apply for LRAP prequalification instead.

On August 28, the Supreme Court rejected the Biden Administration’s request for it to weigh in on the SAVE plan injunction issued by the 8th Circuit. The case will now return to the 8th Circuit to render a final decision.

This week the Department of Education issued more guidance related to the SAVE plan litigation. As of the last week of August:

• SAVE plan enrollees and applicants remain in a forbearance that doesn’t qualify for PSLF;
• The online IDR and consolidation applications remain closed;
• Borrowers can submit PDF applications to apply for IDR or consolidation;
• Borrowers can elect to apply for or switch to only the SAVE or IBR plans; and
• Servicers are still not processing IDR applications.

This means PAYE, REPAYE, and ICR are no longer options. Borrowers who were already enrolled in PAYE or ICR, applied for either plan before July 1, 2024, or applied between July 18 and August 9 can still enroll and/or remain in those plans.

The guidance suggests that servicers can enroll borrowers who have pending IDR applications in a processing forbearance that does count for PSLF for up to 60 days. Borrowers who are close to getting PSLF may consider submitting a PDF application for IBR and entering a forbearance that allows them to continue to make progress toward PSLF. Borrowers who have 120 months of qualifying employment can also apply to “buy back” months spent in forbearance.

Borrowers can continue to wait to switch plans or apply for IDR until the online application is up and running or until the servicers resume processing, or they can submit a PDF application now.

The Biden Administration has notified borrowers with at least one outstanding federal student loan of the possibility of debt relief. As part of a proposed Department of Education rule, the Administration hopes to cancel some or all of the debt for borrowers who:

• Owe more than they did when the started repayment, or when they consolidated their loans.
• Entered repayment on or before July 1, 2005 (for undergraduate-only borrowers) or July 1, 2005 (for graduate borrowers).
• Are eligible for forgiveness under an existing forgiveness program (e.g. IDR forgiveness, closed school discharge, etc.) but have not applied.
• Enrolled in a low value program, such as a school that failed one of the Dep’t of Ed’s accountability standards.

Borrowers who have experienced “financial hardship” may also be eligible, but the proposed rule for such borrowers has not been released.

The final rule must go through before this debt relief can be completed. Borrowers who want to opt out must contact their servicer by August 30, 2024.

On July 18, the 8th Circuit Court of Appeals blocked all provisions of the Department of Education rule that included the new SAVE plan. In response, the Department of Education has put all SAVE plan borrowers into an administrative forbearance that doesn’t accrue interest but does not count for PSLF and IDR forgiveness. For borrowers seeking PSLF, we may need to eventually switch to a different plan. But right now, I recommend being patient for a few days or weeks until the Department of Education can come up with an adequate response.

What we know so far

• All SAVE borrowers are being put into an administrative forbearance.
  
  • The forbearance is interest-free.
  • No payments are due during the forbearance. This is true even if you already received a billing statement for your next due date (it’ll be superseded by the forbearance).

• This particular administrative forbearance does not count for PSLF or IDR forgiveness. That’s because allowing administrative forbearances to count for PSLF is a provision of the blocked rule.
  • Making a payment while in forbearance will not count for PSLF; it’s the status of the loan that matters, not the payment.
  • Previous administrative forbearances did count for PSLF under the COVID payment pause (3/13/20 – 10/1/23) and IDR account adjustment (pre-2020, post-October). Those were different programs not affected by this ruling.
  • We don’t know yet whether you can opt out. I wouldn’t waste your time calling your loan servicer until we know more.

• The IDR and consolidation applications on studentaid.gov are closed.
  • The Department of Education has put a pause on new applications while they interpret the ruling and figure out what to do.

• Borrowers who aren’t enrolled in SAVE are not affected.
  • Wondering what plan you’re in? Check out your loans on studentaid.gov.

What you can do

• The best course of action is to do nothing… yet. The ruling is so recent that your account is probably not even updated yet and the Department of Education has not yet produced any guidance. For all we know, the Dep’t could switch all the SAVE borrowers to a different repayment plan tomorrow, another ruling could come down, or a future action could retroactively count these months as qualifying.

• If you’re really close to PSLF, consider the PSLF Buyback. There is an option to make a lump sum payment to get months in forbearance to count toward PSLF through the PSLF Buyback program. But, you need to submit a request to participate and to know how much to pay. If you’re supposed to get PSLF now, or very soon, you could just ride out this forbearance and do the buyback to complete your 120 months.

• If this forbearance lasts a long time, SAVE borrowers will probably want to switch to a different plan eventually. Again, let’s see what solution the Dep’t of Ed comes up with over the coming weeks. If their solution is that SAVE borrowers stay in a non-qualifying forbearance until SCOTUS rules on the plan, then we’d want to switch to IBR (or see if the Dep’t reinstates any of the retired IDR plans). If you rush and switch before we have more info, you could end up with an unnecessarily higher payment.

• To reassure you, PSLF and IBR are secure. They are written into statute and would take an act of Congress to change. Recent litigation involves rules and other regulatory processes.

Borrowers with certain types of loans who want to take advantage of the IDR account adjustment must apply for loan consolidation by June 30.

Borrowers who may benefit from consolidation include:

• Those with loans that are currently ineligible for forgiveness, like Perkins and FFEL loans.
  • Consolidating Perkins and/or FFEL loans allows those loans to be eligible for 20-25 year IDR forgiveness and 10 year Public Service Loan Forgiveness. 

• Borrowers with loans with different lengths of repayment history (i.e., loans from different schools).
  • Borrowers with loans from different institutions (say, from undergrad and law school) can consolidate their loans to accelerate loan forgiveness.
  • For example, if you made 3 years of payments on your undergraduate loans before law school, you can consolidate the loans and the new consolidation loan will be 3 years closer to 20-25 year IDR forgiveness. If you worked 30+ hours a week for a 501(c)(3) nonprofit or government during that time, your new consolidation loan will be 3 years closer to 10 year PSLF forgiveness.
  • This wouldn’t apply if you went straight from one school to another–your loan would have been in its grace period and not in repayment status.

Here’s what you need to know about the consolidation process:

As the Department of Education transitions to a new servicing platform, it’ll pause PSLF form processing, count updates, and discharges from May – July 2024. You can still submit forms, but you won’t see your payment counts updated or get forgiveness until after the transition is complete. If you reach loan forgiveness during this period, you’ll receive a refund for excess payments made.

Today the Department of Education announced that borrowers will not need to recertify their income for existing IDR plans until September 2024 at the earliest (with existing plans expiring in November 2024 at the earliest).

March 2024 or earlier recertification date? The Department of Education may put you in an administrative forbearance to ensure you continue on your current plan. Already recertified? If you payment went up, they’ll revert you back to your old plan. Recertified and your payment went down? You’ll continue on your new plan.

The Department of Education has proposed draft regulations regarding student loan cancellation. After the Supreme Court struck down the administration’s more broad-based student debt cancellation plan in summer 2023, the Department is proposing narrower regulations through the negotiated rulemaking process. The draft regulations target four groups of borrowers who could be provided debt relief. Those include: 1) borrowers who have outstanding federal student loan balances that exceed what they originally borrowed; 2) borrowers who have loans that first entered repayment 25 or more years ago; 3) borrowers who took out loans to attend programs that provided insufficient earnings for graduates or have high student loan default rates; and 4) borrowers who are eligible for programs like IDR, PSLF, or closed school discharges but have not yet applied. Stay tuned as the rulemaking process continues.

Some loan servicers have placed borrowers into an administrative forbearance while they process their IDR applications and return them to regular repayment. Thankfully, this administrative forbearance will count toward PSLF. The Department of Education announced that it will count these months toward PSLF, and new PSLF regulations that will be implemented July 1, 2024 also state that administrative forbearances of up to 60 days can count toward PSLF.

Last week, the Department of Education announced the first round of loan cancellations under the IDR account adjustment program, initially announced last spring. So far 804,000 borrowers have been notified that they have a total of $39 billion in federal student loan debt that is being discharged in the coming weeks.

The account adjustment is intended to fix past mistakes by awarded IDR and PSLF forgiveness credit to borrowers who were in repayment status regardless of payment made, loan type, or repayment plan. Borrowers in 12 or more consecutive months of forbearance or 36 or more months of cumulative forbearance are also receiving credit toward PSLF and IDR forgiveness, as are some borrowers with deferments.

More borrowers will continue to see their payment counts updated under these rules throughout 2024.

The Department of Education has announced a new Income-Driven Repayment plan to replace the existing REPAYE plan. The plan is called Saving on a Valuable Education (SAVE) and is the most generous repayment plan yet.

SAVE will increase the amount of protected income from 150% to 225% of the federal poverty standard, reducing the size of borrowers’ monthly payments. The plan will also eliminate unpaid interest accrual; the payment you make will go toward interest, but unpaid interest will not accrue. The plan eliminates the fear of exponential loan growth.

There are other plan benefits, like excluded spousal income for married borrowers who file separately, reduced monthly payments for borrowers with undergraduate loans, and a shorter time to forgiveness for borrowers with low loan amounts. Some of these changes will go into affect in summer 2023, whereas others will take plan in summer 2024.

Borrowers who want to join the SAVE plan should apply for or switch to the REPAYE plan until the SAVE plan application becomes available. Borrowers who are already enrolled in REPAYE will be switched automatically. The PAYE and ICR plans will no longer be available to join after July 1, 2024.

Disappointingly, the Supreme Court struck down Biden’s $10k – $20k debt forgiveness plan this morning.

While the plan is out of the picture for now, there’s some room for hope. The Department of Education is finalizing a new Income-Driven Repayment plan that will reduce monthly payments, prevent unpaid interest accrual, and reduce the time to loan forgiveness for some borrowers. Now is also the ideal time to consolidate your loans if you have any FFEL or Perkins loans that aren’t eligible for PSLF or IDR. Federal student loan borrowers–and those who consolidate their FFEL and Perkins loans by the end of 2023–will be evaluated for the IDR & PSLF account adjustment next year, which could reduce your time to IDR or PSLF forgiveness.

While this particular plan is out of the picture, there are other avenues to broad-based debt cancellation. The Department of Education has already announced its intent to conduct negotiated rulemaking on debt cancellation under the Higher Education Act. You can read more about the Department’s plans here.

Federal student loan borrowers haven’t made payments or had interest accruing in over three years. Finally, the payment and interest pause is coming to an end later this year. In June 2023, the Department of Education clarified that interest on federal student loans will resume accrual in September and payments will resume in October.

To prepare for the resumption of payments, follow these steps:

• Log into studentaid.gov to take an accounting of your loans and review your loan servicer.
• Log into your loan servicer’s account, update your contact information, and reauthorize or set up autopayments.
• Review your payment details and plan. If you’re planning on LRAP and/or PSLF, make sure you’re enrolled in an Income-Driven Repayment plan (see more details below).
• If you need LRAP support, you should apply in August or September. We’ll update you with more details as we learn more about the resumption of repayment.

Some best practices include:

• Make sure you’re taking action early and not waiting until the last minute. You could miss a payment or end up in an unaffordable payment plan.
• Review your budget and prepare for an increase in expenses now.
• Getting ahold of your loan servicer can be challenging right now. Be patient; you may need to call multiple times or use the live chat feature. If you need to get ahold of your servicer, set aside some time to account for long holds.
• Keep documentation of your payment plan, payments, PSLF and IDR applications, and correspondence with your servicer.

The Department has also announced a three-month grace period for missed payments once payments become due in October. This “safety net” will prevent borrowers who fall behind from getting penalized on their credit reports until 2024, and any prevent delinquent borrowers from falling into default until 2025.

As of Spring 2023, borrowers and their employers can now sign and submit PSLF Forms digitally via DocuSign using the PSLF Help Tool. These updates will, for the first time, let borrowers complete the entire PSLF application process online, and borrowers will no longer need to fax or mail in their application with a wet signature, which will hopefully reduce processing time. In addition, borrowers can now digitally track the status of their PSLF form in the My Activity section of their StudentAid.gov account, where they can see updates such as whether their employer has digitally signed their PSLF form and when their form has been processed.

In April 2022, the Department of Education announced changes that will allow borrowers to reach forgiveness under the Income-Driven Repayment (IDR) plans and Public Service Loan Forgiveness (PSLF) sooner. The Department has continually updated this guidance over time, with changes announced in October 2022 and beyond.

Under the new guidance, borrowers will now receive credit toward PSLF and IDR 20-25 year forgiveness for:

• Any month in which a borrower was in a repayment status, regardless of loan type, repayment plan, or whether payments were partial or late;
• Any month in which loans were in repayment, deferment, or forbearance status prior to consolidation;
• Months while a borrower spent 12+ months of consecutive forbearance;
• Months while a borrower spent 36+ cumulative months in forbearance; and
• Any month spent in deferment prior to 2013 (exception for in-school deferment).

Borrowers who have commercially-held FFEL loans, Perkins loans, or HEAL loans who want to benefit from these changes should apply for Direct Loan Consolidation by the end of 2023.

Borrowers who have 20 – 25 years of qualifying IDR payments, and/or 120 months of qualifying PSLF payments under the new guidelines will start to see their loans forgiven in spring 2023. All other borrowers will see their accounts update in 2024.

On November 1, 2022, the Department of Education announced new regulations governing the Direct Loan program and PSLF that will go into effect on July 1, 2023. The big changes include:

• Unpaid interest will no longer capitalize in when not statutorily required, including when borrowers enter repayment, exit a forbearance, annually after periods of negative amortization under the alternative or ICR plans, when a borrower defaults, and when borrowers on the PAYE or REPAYE plans fail to recertify their income or exit the plans. 
• Partial, late, and lump sum payments now qualify for PSLF. Payments can qualify for PSLF if borrowers: pay at least the full scheduled payment amount, or; pay in multiple installments that equal the full scheduled amount, or; pay a lump sum equal to or greater than the scheduled amount in advance of the due date. Borrowers paying in lump sums can now be “pre-paid” up to 12-months in advance or their next IDR annual certification date, whichever is earlier. Previously, payments had to be on-time, made each month, and in the correct amount to qualify, and borrowers who paid more were penalized.
• Full-time employment for PSLF will now be just 30 hours a week. Previously, borrowers had to either meet their employers’ definition of full-time or work 30 hours a week, whichever was greater. Employers can implement this provision before 7/1/23 at their discretion.
• Borrowers must receive a W-2 from a qualifying employer to qualify for PSLF. This is a change from the previous “hired” and “paid by” language.
• Payments can qualify so long as a borrower was employed at any point during the month the payment is credited. Previously, borrowers had to be employed on the exact date they made a payment.
• Borrowers will no longer lose all credit toward PSLF after loan consolidation, but the new consolidation loan will be awarded the number of qualifying payments equal to a weighted average of the loan balances. For instance, if a borrower has 60 qualifying payments on a $20,000 loan and consolidates that loan with $40,000 in loans with no qualifying payments, then the consolidation loan would be assigned 20 qualifying payments. This is a change from the prior rule which would reset all new consolidation loans’ qualifying payments to 0.
• Borrowers in certain deferments and forbearances can receive credit for PSLF. The cancer treatment deferment, economic hardship deferment, military service deferment, post-active-duty student deferment, AmeriCorps forbearance, and National Guard duty forbearance now qualify for PSLF assuming borrowers are working full-time in PSLF-qualifying employment. For all other forbearances and deferments, borrowers can receive credit as part of a new “hold harmless” option. Borrowers will be able to go back and make payments equal to or greater than what they would have paid to count that time toward PSLF.
• For NGOs that are not 501(c)(3)s, employers must have a majority of their full-time equivalent employees be working in one of the following areas: emergency management, civilian service to military personnel, public safety, law enforcement, public interest law services, early childhood education, public service for individuals with disabilities or the elderly, public health, public education, public library services, school library, or other school-based services. This is a clarification from the prior “primary purpose” rule the Department used to use when determining whether a non-governmental organization qualified for PSLF.
• Teachers and instructors will be considered full-time employees for PSLF if they are contractually employed at least 8 months over a 12-month period. Non-tenure track faculty will be considered full-time employees for PSLF if: they teach at least 9 credit hours per semester, 6 credit hours per trimester, or 18 credit hours per calendar year, or; if they multiple each credit hour taught by 3.35 hours and that number is 30+, or; if they have 30+ student-contact hours by self-attestation substantiated by the employer.
• Independent contractors can now qualify for PSLF under narrow circumstances. Borrowers working as contracted workers for a qualifying employer in a position or providing services which, under applicable State law, cannot be filled or provided by a direct employee of the qualifying employer, can now qualify for PSLF.
• Borrowers can request reconsideration of their PSLF denial within 90 days of notice.

You can read the final proposed rules here.

On August 19, 2021, the Department of Education announced that it was automatically discharging student loan debt for some borrowers with a total and permanent disability (TPD). Borrower identification will occur through a matching program with the Social Security Administration. The discharge is expected to affect over 323,000 borrowers and discharge over $5.8 billion in student debt.

Berkeley Law’s LRAP has expanded to cover three new sets of borrowers:

• International J.D. students working in LRAP-qualifying employment in the U.S. or with an international NGO;
• Undocumented J.D. students with an AB 540 nonresident tuition exemption; and
• Current and former LRAP participants using the PSLF Buyback program.

The LRAP Handbooks contain details about eligibility and application requirements.

One of the defining characteristics of Berkeley Law is its public mission. Integral to this goal is supporting our graduates working in public interest after law school. Over the past few years, we’ve made a number of programmatic improvements to our Loan Repayment Assistance Program (LRAP), in addition to increased outreach and communications. Today, we’re pleased to announce our most impactful policy change yet.

Starting October 1, eligible graduates earning up to $120,000 can now receive LRAP support, up from our previous $100,000 income cap. This change means more graduates can now take advantage of LRAP’s support. Additionally, our out-of-pocket contribution formula is changing. Graduates making $80,000 a year receive 100% LRAP support for their income-driven student loan payments, resulting in no out-of-pocket costs. Graduates making over $80,000 and up to $120,000 will now pay just 25% of their income over $80,000 toward their loans out-of-pocket, a reduction from our previous formula requiring a 35% contribution. This change means public interest graduates will now receive more LRAP funding and will need to spend less of their own money on student loan expenses.

With these improvements, Berkeley Law’s LRAP is assuredly the best program of any public institution and now has one of the lowest out-of-pocket contribution formulas of any LRAP, even among private institutions. Our LRAP excels in other ways, too. Compared to other LRAPs, Berkeley Law’s program has broad eligibility requirements that allow anyone working in law-related, public interest employment to qualify for funding. Our LRAP gives participants the flexibility to enter and exit the program at will, allowing graduates to follow their ideal career paths. And Berkeley Law maximizes LRAP support by not considering assets, allowing for dependent deductions, and protecting a limited amount of side job income.

For an overview of all of LRAP’s policies, please read the latest LRAP Handbooks. Should you have any questions, please contact Berkeley Law’s LRAP team at lrap@law.berkeley.edu.

Worried about meeting the 3.5 year LRAP deadline? You can now apply to pre-qualify for 120 months of LRAP funding without having to submit an LRAP application.

To pre-qualify, you need to be 1) in greater-than-half time and paid law-related, public interest work making under the LRAP income cap; 2) be in repayment (not in school, in a grace period, or in a forbearance or deferment (the automatic COVID forbearance doesn’t count)); 3) be enrolled in an income-driven repayment plan; and 4) have a $0 monthly payment.

You must submit both an Employer Verification Form and documentation of your $0 payment to apply.

One of Berkeley Law’s defining characteristics is its public mission and commitment to supporting our students and graduates pursuing careers in public service. Our Loan Repayment Assistance Program is crucial in this regard. We are pleased to announce a programmatic change to Berkeley Law’s Loan Repayment Assistance Program to make it more generous for our graduates. Effective August 1, 2021, LRAP’s out-of-pocket contribution income threshold will increase from $70,000 to $80,000. In short, this change will allow more graduates to receive a greater amount of LRAP support, consistent with Berkeley Law’s commitment to public interest and public service graduates.

Starting August 1, LRAP will cover 100% of all eligible loan payments for LRAP participants with annualized full-time incomes of $80,000 or less. For participants making over $80,000, LRAP assistance will be prorated. As a result, more participants will be able to have 100% of their eligible loan payments covered, and more participants with incomes above $80,000 will be eligible for LRAP support with a smaller out-of-pocket contribution.

To calculate your LRAP eligibility, use our LRAP Calculator.