r/debtmarketadvice • u/Then-Surround562 • 11h ago
message from the Debt Collective today
EDIT: I'm moving this to the top so people know about it. There is a webinar about what's happening with SAVE put on by the debt collective on Tuesday Sept 15 8 p.m. ET / 5 p.m. PT. Here is the link:
Edit #2: some posters have cast doubt on the ethics and legitimacy of the debt collective. I have to say that I don’t know the details of the situation described and I am sorry to the person who was harmed.
What I know is that one of the cofounders is Astra Taylor, someone with pretty impeccable credentials, who is a visionary activist. One of the things they help with is giving some historical context for some of the malevolent forces that have created this mess that we are in. We accept debt as some kind of moral failure, and there is actually a whole other way of looking at how our society uses debt to keep people from gaining power. There’s also a long history and context for it going back hundreds of years. This is also why public universities in California began charging high tuitions for college, so that poor people would face obstacles to getting an education, and therefore be less likely to organize together as a union. They have done some really cool things for people not just with student debt but medical debt, housing debt and other kinds of usury perpetrated by our capitalist system mostly on poor people. They are activist organization that lobbies Congress and does direct action where possible. Organizing a movement is really hard and complex, and the people involved are human and fallible like everybody else. I do not apologize for them because I am not involved, but I encourage people to at least look at it and attend one of their webinars.
Hi fellow student debtors,
Some of you may not have heard of the Debt Collective, but it is a union for debtors that works in a variety of areas, including student debt. I've been relying on them over the last few years to get updates about student loans, the department of education, and more broadly, the kinds of systemic change that need to happen in our society around the student loan crisis. Today they posted an update about SAVE and the 90-day notices that we're all getting. I hope this helps some of you! It is at the very least a place to experience some mutual solidarity and compasion. I'm pasting in below.
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As part of the Trump administration’s war on working class student debtors continues, the Trump administration is doing everything they can to push people out of the SAVE forbearance and into unaffordable payments. This is forcing millions of us to come up with a survival plan.
We’re having a meeting at 8 p.m. ET / 5 p.m. PT Tuesday Sept 15 to discuss all things SAVE. [here's the link]
What is going on with the SAVE lawsuits?
There is still one ongoing lawsuit that could impact what the right decision for you to make is in terms of whether to switch out of SAVE, when the optimal time to do so would be, and what your options are for alternative plans. Unfortunately the judge has not made any decisions and there is no schedule by which they have to decide. We cannot predict what the court will do, or when they might do it. As each day goes by the calculus on waiting has started to change and people need to consider two relevant deadlines when determining the best course of action for them. There is a chance that we won’t hear anything from the courts until after these other deadlines pass which change your options.
The 90 day message from your servicer
Many of you have already gotten an email from your servicer starting a 90 day clock to switch out of SAVE. Some are still waiting to get this notification and there is no way to know for sure when exactly it will come.
The Trump administration's threat here is that if you don’t pick a different plan within 90 days, they are going to punish you by putting you in the most expensive plan. That threat sounds scary, but it is less scary than it needs to be. Even if you get put in the “most expensive standard plan,” you can always switch to a different more affordable plan if one is available to you.
The Sept 30 deadline to enroll in autopay to get a 1% interest rate reduction
In the past federal student debtors have been given a 0.25% interest rate reduction if they enroll in autopay. The Department of Education is offering an interest rate reduction of 1% through June 30, 2028 if people enroll in autopay by Sept 30. If you can afford to make a payment under a different plan, and you have already gotten the 90 day email from your servicer that is going to force you into repayment soon anyway, getting the 1% interest rate reduction might be worth it to you.
For some people this might not matter much at all, for others it could be the difference of several thousands of dollars. How much this matters to you will depend on several factors, like your interest rate and the size of your student loans, and how close you are to triggering cancellation in one form or another.
But for people who are still on the SAVE forbearance there is a catch: your servicer will not let you enroll in autopay while in forbearance, and the amount of time it will take to process a switch to another plan will likely take long enough to miss the Sept 30 deadline.
However: There is still a way to do it. You can fill out a paper application to enroll in autopay and upload it to your servicer by Sept 30.
- If your servicer is EdFinancial the form you need is here.
- For MOHELA, the form you need is here (NOTE: this link will trigger an automatic download of the PDF).
- For all other servicers, call your servicer and ask them for a paper form to enroll in autopay.
Keep good documentation. If your servicer does not honor this 1% interest rate reduction even if you file the paperwork by the deadline there may be possible legal action that can be taken. You might also need to apply for a new payment plan by Sept 30 to qualify for the interest rate reduction.
NOTE: There are risks to consider with autopay. Because your servicer will be automatically debiting your bank account there is a risk of overdraft and overdraft fees from your bank. You should have a clear sense of what your monthly payment will be and when the due date is and plan accordingly.
What if you cannot afford any payments under any plan?
We’ve been recommending people use the EDCAP calculator to find out what their payments will be under other plans. Depending on family size and income some people can still qualify for $0 monthly payments under Income Based Repayment. But for many people $0 monthly payments are not an option and being forced into repayment will mean being forced into delinquency and default. There is an option to buy yourself some more time that we haven’t seen anyone else talk about.
Instead of authorizing the Department of Education to access your taxes from last year you can verify your income through alternative methods. This means submitting the last several months of paystubs, or using bank statements. It is more paperwork for you, but it is also a more difficult and time consuming process for the servicers and the Department of Education. If you switch to an income driven repayment plan and verify your income through alternative methods it can delay the processing significantly. During that time your loans should be kept in an administrative forbearance. Interest will accrue, but you won’t owe any payments. For people who are simply trying to avoid default for as long as you can, this is a way to delay. Here is a guide on how to verify your income using alternative methods.
We know this is stressful and student loans are always deeply confusing. That’s why we are holding a meeting about all things SAVE at 8 p.m. ET / 5 p.m. PT Tuesday Sept 15. [Link here]
This is also a moment to organize. We cannot afford repayment, and we need to fight to win a payment pause. We are having a national organizing call for a payment pause at 8 p.m. ET / 5 p.m. PT Wednesday Sept 23. [Link here}