NEW MEXICO (KRQE) – Several federal student financial assistance programs are in jeopardy after recent federal funding cuts to the Department of Education. Teachers said it’s a move that’s making it even harder to repay their student loans.
“Saving on a Valuable Education,” better known as the SAVE plan, is one of those programs in hot water. Earlier today, members of the American Federation of Teachers New Mexico explained how they’re navigating the confusion surrounding their loans.
“I don’t know, I’m not sure what I should do,” said Rachael Sonia, Albuquerque Public Schools teacher.
Local teachers, who have been under the SAVE plan for years, are now uncertain about the future of the program and others like it. “It would look at all of my income and kind of generate this figure that would make those remaining 120 payments more doable, more accessible for me, and now that is currently in jeopardy,” said Whitney Holland, President of AFT New Mexico.
Through the Public Student Loan Forgiveness program, teachers like Whitney Holland are rewarded for their work. “The Public Service Loan Forgiveness program was designed and functions as an incentive program for people to go into critical jobs,” said Sonia.
And after chipping away to make 84 payments towards Holland’s end goal, new numbers show she’s got an even longer road ahead of her in becoming debt-free.
“I am operating on the perception that I am going to have to start paying my student loans again. Which is fine ’cause that’s what I signed up for when I borrowed that. But I just want clear information, and I want to know what the expectation is,” said Holland.
In February, a court injunction prevented the U.S. Department of Education from implementing the SAVE plan, which is one of several income-driven repayment programs. This left those programs and online loan applications temporarily unavailable. In late March, while the application became available again, the federal student aid shows loan services are still updating their systems in accordance with the court’s actions.
“It’s really disheartening to think that that whole program might just be taken away. Right, because I have made very specific choices about my student loan based upon this program,” said Sonia.
Rachael Sonia says if she chooses to change her loan plan, she’ll be forced to pay almost three times as much as before. “‘Cause it can be deeply frustrating to be looking at your student loan servicer’s website and be like, ‘What is happening to my financial future?’” said Sonia.
And while the uncertainty still hangs in the air, the federation hopes teachers facing the same challenges won’t do it alone. “AFT holds student debt clinics where people come and talk about, like, here’s what the process is in this moment, and so helping our members navigate through that process and achieve that forgiveness, whatever that looks like,” said Holland.
Many under the SAVE plan, like Sonia, are now in a forbearance period until July, but are required to recertify their income-driven repayment plan by June to continue to qualify for the Public Service Loan Forgiveness program.
Chairwoman Amy Barela, with the Republican Party of New Mexico, responded in a statement saying:
The Republican Party of New Mexico recognizes the recent federal court action that halted portions of the Biden Administration’s SAVE Plan and other income-driven repayment (IDR) programs. We understand that the COVID-19 pandemic significantly impacted careers and financial futures across America, and in response, action was taken to provide relief to borrowers facing hardship.
However, education is ultimately an investment in one’s future — just as every profession requires an investment in the tools of the trade. Doctors, electricians, teachers, mechanics — all must invest before they can prosper. Student loans are no different.
The SAVE Plan attempted to restructure repayment options, but as the court ruled, aspects of its implementation did not align with established federal law. While the online IDR applications for programs like Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) are once again open, loan servicers are still updating their systems under the court’s direction, which will affect how applications are processed moving forward.
We believe in fair, responsible repayment solutions that help students continue their education without placing undue burdens on taxpayers or destabilizing financial systems. True reform must balance compassion for borrowers with respect for the rule of law and the long-term sustainability of our education system. As public servants, we will continue to advocate for policies that promote personal responsibility, career growth, and educational opportunity.
Chairwoman Amy Barela
Rebublican Party of New Mexico
