Individuals who sign up for the SAVE plan will also avoid accruing unpaid interest on their loan balances, meaning they won't see their balances grow over time if their monthly payment is less than the interest owed each month. Borrowers on the SAVE plan who owe $12,000 or less on their federal student loans can also have their loan balances forgiven in 10 years instead of 20 years.
If you do plan to sign up for the SAVE plan or for another income-driven repayment plan, the U.S. Department of Education says you should do so as soon as possible.If you were on an income-driven repayment plan before the payment pause began in March 2020, the Department of Education says you'll have six months to re-certify your income and that this normally has to be done every year.
Studentaid.gov says you have until"before August" to enroll in autopay to qualify for the discount in your first monthly payment, and that you'll need to re-enroll if you were using autopay before the current payment pause started in March 2020. Since interest rates on federal student loans are fixed for the life of the loan, most borrowers will see their rates revert to whatever they were before the Covid-19 payment pause began. However, borrowers who consolidated their federal loans in the last few years with a Direct Consolidation Loan will see a new rate that uses a weighted average of the rates across all the loans they consolidated.
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