Important Announcement

A federal court issued an injunction preventing the U.S. Department of Education from implementing the Saving on a Valuable Education (SAVE) Plan and parts of other income-driven repayment (IDR) plans.

Important Update on the SAVE Administrative Forbearance

Income-Driven Repayment (IDR) processing

A federal court issued an injunction changed how ED can implement certain parts of IDR plans. Because of these changes, the U.S. Department of Education has instructed federal student loan servicers to deny IDR applications where "lowest monthly payment" was selected, more than one IDR plan was selected, or an IDR plan was not selected. Visit Studentaid.gov/loan-simulator to review your options and apply for an eligible repayment plan.

Saving On A Valuable Education (SAVE) Plan Administrative Forbearance

In July 2024, a federal court injunction blocked parts of the SAVE Plan. As a result, eligible federal student loans were placed in forbearance with a 0% interest rate. During this forbearance interest had not accrued; therefore, loan balances (including principal and interest) have not increased during this forbearance. You will not have to make payments until the SAVE forbearance ends. In February 2025, a second federal court injunction ended the SAVE 0% interest rate. To comply with this injunction, loan(s) in the SAVE Administrative Forbearance began accruing interest on August 1, 2025.

You can view your interest rate, outstanding interest amount, or make payment toward interest via your online account. For more information, view our FAQs!

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Official Servicer of Federal Student Aid

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Closed School Discharge

Alert

On Aug. 7, 2023, a federal court delayed the effective date of the latest regulations governing borrower defense and closed school loan discharges. Borrowers may still apply for a closed school discharge. As of March 1, 2024 we will begin to process applications received on or after July 1, 2023, using earlier rules.

Note: Borrowers approved for discharge only under the new regulations will receive a forbearance that will end 60 days after the litigation is resolved. See Closed School Discharge | Federal Student Aid for updates .

In certain instances, the closure of your school may result in a discharge, or release of your obligation to repay your student loan. Here's what you need to know.

You are eligible for a discharge if:

Your school closes while you are enrolled and you're unable to complete your program as a result. Note that if you were on an approved leave of absence at the time of the closure, you are considered to have been enrolled.
Your school closes within 180 days after you withdraw.

You are not eligible for a discharge if:

You withdraw more than 180 days before the school closes.
You are completing a comparable educational program at another school (through a teach-out agreement, a transfer or any other comparable means).
You have completed all the coursework for the program, even if you have not received a degree, diploma or certificate.

How to apply for a Closed School Discharge

If the school you attended recently closed and you believe you may be eligible for a closed school discharge, please contact MOHELA to learn about the Closed School Discharge application process.

Tax Implications if Your Loans are Discharged

As a result of a change in tax law, the Internal Revenue Service (IRS) has determined that loan balances that are discharged due to Death are not considered income for federal tax purposes if the discharge occurs during the period from January 1, 2018, through December 31, 2025.

If you receive a Form 1099-C, you should keep the form with the borrower's records, but you do not need to include it when filing the borrower's federal tax return. For additional information, visit irs.gov .

The discharged loan amount may be considered income for state tax purposes. You may want to consult with the state tax office or a tax professional before you file the borrower's state tax return.

Additional Information

For further information, including a comprehensive Q&A about Closed School Discharges, visit the Office of Federal Student Aid website .