Applied For SAVE But Never Got In? Loan Servicers Are Denying Applications

Student loan borrowers who applied for the SAVE plan but were never officially enrolled are now receiving denial letters from their loan servicers. These are borrowers who submitted an application for SAVE or an old application selecting the option "Lowest Repayment Plan", but their applications were never actually processed. These borrowers had been in administrative forbearance while waiting for an outcome to their application.

Borrowers have 90 days to submit a new income-driven repayment (IDR) application or their SAVE forbearance ends and payments resume on their old plan.

Hundreds of thousands of borrowers submitted IDR applications requesting SAVE and have been sitting in a administrative forbearance (some for well over two years) waiting for an answer. That answer has now arrived: denied.

Unlike borrowers officially enrolled in SAVE, who get auto-enrolled in the Standard or Tiered Standard plan if they miss their 90-day deadline, applicants who miss the deadline get kicked back to their previous repayment plan, or the Standard plan if they weren't enrolled in a plan before (such as new borrowers leaving college). For many, that could mean a payment far higher than what they expected under an income-driven plan.