Student debt relief activists march near the U.S. Capitol on June 30, 2023, in Washington, D.C. The Supreme Court on blocked President Joe Biden's student loan debt relief plan from taking effect, delivering rulings in a pair of cases challenging the program. File Photo by Ken Cedeno/UPI | License Photo
June 24 (UPI) -- On July 1, student loan servicers will begin notifying borrowers enrolled in SAVE repayment plans that they must switch to a new plan and borrower advocates warn that what comes next will likely be an increase in defaults and delinquencies.
Not all borrowers will receive a notice on July 1. In fact, many will not. The notices will be staggered across the millions of people enrolled in the SAVE program over the coming months. Once a borrower receives their notice, the clock starts on a 90-day window for them to enroll in an eligible repayment plan.
If a SAVE enrollee fails to switch to another repayment plan, they will be automatically enrolled in a standard repayment plan, which will carry a higher monthly payment requirement. In many cases, that plan will not be their most affordable option.
Betsy Mayotte, president and founder of the Institute of Student Loan Advisors, told UPI that the borrowers her organization hears from are more frequently expressing confusion over which plan is best for them.
