Student Loan Expert Q&A: SAVE Plan, Parent PLUS, and PSLF

What do we do now that the SAVE plan is ending?

You need to choose a new repayment plan. You can choose IBR today, or you can wait until this summer and choose RAP.

When is the RAP going to be available?

It’s going to be available in July. So those are your two options.

My student loan was forgiven January 25th, and it’s in furlough and added 20K.

It’s unclear whether you mean January 2025 or January 25th of 2026. “Furlough” is not a term used in student loan servicing, so it’s hard to say exactly what’s happening. Do you mean it’s in forbearance? Deferment? Default?

Applying for borrower defense to repayment and ending up in forbearance does not mean your student loans are forgiven. Were you part of the settlement class that went through on March 31st or April 15th?

If you were not part of those lawsuits and you simply filed a borrower defense to repayment application, you do go into forbearance, but that doesn’t change the fact that your claim hasn’t been adjudicated yet and you might not be forgiven.

Do I think Columbia University is worth it to take out student loans?

Columbia University is worth it if you are not going to spend more than $80,000 in total. So if you’re borrowing $20,000 a year over the next four years because you got a generous financial aid package, sure, go for it.

But if you’re borrowing more than $80,000 for college, there’s essentially a 0% chance that’s going to work out for you and your family financially over the next 20 years of your financial life.

If I have a bunch of Parent PLUS loans at a high rate, would it be best to consolidate with SoFi?

The highest rate a Parent PLUS loan would ever be is 9%. If you’ve taken out a bunch of different loans, you’re likely somewhere in the 7–9% range.

If your credit is really good, your income is really good, and you don’t need any type of income-driven repayment plan or Public Service Loan Forgiveness, then sure — refinance with SoFi or any lender.

There’s no brand preference here. You should get 3 to 5 quotes, and SoFi can be one of them. They are great at marketing, but that doesn’t necessarily mean they’ll have the best rates. You might be surprised to find you’re still looking at a 7% loan, so consider whether giving up options like income-driven repayment plans is worth it.

What’s the best thing to do with a $100,000 inheritance?

Invest it. Put it in the S&P 500 or a low-cost index fund and let it grow so that in 20 or 30 years, it becomes $500,000.

Any recommendations for doctoral scholarships?

Most PhD doctoral programs include fellowships and assistantships as part of the admissions offer, so the first step is knocking on the school’s door to see what kind of packages they will offer you.

Beyond that, industry associations are a solid resource. Every kind of industry and trade association tends to have scholarship programs — for example, the American Medical Association, the American Psychological Association, and similar groups all offer scholarship opportunities.

Do you think hospitals will still be qualifying employers for PSLF in the future?

Generally, yes.

There is one risk: an upcoming PSLF rule could disqualify employers found to conduct substantially illegal activity. There’s an argument that providing gender-affirming care could be classified as such under that rule.

That said, there are so many lawsuits that are likely to block that rule before it goes into effect. It probably won’t become a real issue.

My son wants $100K for an MBA. I know we would have to co-sign. I can’t convince him otherwise.

An MBA is the riskiest graduate degree that exists. Roughly 50% of MBAs have a negative return on investment financially. Another 40% break even, and only about 10% pay off with $1,000,000 or more in lifetime earnings.

The MBA is almost always only worth it for workplace politics or for finance, and only if you want to get into a very specific career field that you already have connections in. It’s not going to be your ticket into something you don’t already have a foothold in.

The top recommendation is that employers should pay for it — whether as part of salary negotiations, reimbursement programs, or compensation packages that offset the cost. An MBA is almost never beneficial for someone who just graduated college and has no real-world work experience. It doesn’t help you navigate what you haven’t already started navigating. (And for what it’s worth, this comes from someone who has an MBA firsthand.)

I’m in the SAVE plan and I need to switch. What do you recommend? Also married.

You have a couple of options. You can switch to IBR today, or you can wait until the Repayment Assistance Plan becomes available this summer.

The best move is to run the calculators on The College Investor, see which payment plan you can afford, and then make the switch.

It used to be more complicated when there were many repayment plans. Now you really have two options — or three if you want to count the standard plan. Most people were in SAVE for a reason, and the standard plan usually wasn’t it.

Going back to the Columbia question — not repayment, but is there any way to lower your cost?

You can appeal your financial aid award, but it’s very late in the game to do so.

VOO in my Roth — what would be a good complement?

The Vanguard ex-US international fund (ticker VXUS) would be the recommendation. It covers international stocks that exclude the United States.

You don’t need bonds if you’re trying to grow your Roth IRA. Focus on adding international exposure, or increasing it — you already get a small amount of international exposure through VOO.

Would you recommend looking outside the United States for college?

Studying abroad can be a legitimate way to reduce the cost of a college education, particularly in countries where tuition is heavily subsidized or free for international students. European universities, for example, are worth researching if cost is the primary concern. The trade-offs include distance from home, differences in credential recognition, and potential challenges re-entering the U.S. job market depending on the field — so it depends heavily on your goals and circumstances.