July 17, 2025 • 11 mins
Questions? Thoughts? Send a Text to The Optometry Money Podcast!
Episode Summary
In this timely episode, Evon unpacks the Department of Education’s recent surprise announcement that interest will resume accruing on the SAVE plan’s current forbearance beginning August 1, 2025. We explore what this means for optometrists managing student loans - especially those approaching forgiveness eligibility or considering refinancing.
What You'll Learn
- Surprise Announcement: Why SAVE’s interest-free forbearance ends on August 1, 2025, and how to prepare
- OBBBA Overview: How this new legislation (effective July 2026) changes income-driven repayment plan options - removing SAVE, PAYE, ICR plans as available options for current optometrists
- Repayment Roadmap: How optometrists should evaluate refinancing, staying federal, or switching plans based on degree completion and loan timing
- IDR Plan Comparison: Breaking down olcd vs. new IBR, PAYE, and SAVE rules - including repayment terms like 20‑year repayment at 10% of discretionary income
- Strategic Tax Planning: Using filing status and extensions (especially important in community-property states) to lock in the lowest monthly payment
- Timeline Guidance: When key deadlines hit (Aug 1, 2025; July 2026; July 2028) and how to reconcile existing loans within the new REPAY plan framework
Resources Mentioned
- Department of Education Announcement - SAVE Interest Accrual Begins
- The Optometry Money Podcast Ep 143: How the Final One Big Beautiful Bill Act Impacts Optometrists – Taxes, Student Loans, and More!
- Click here to Subscribe to the Eyes On The Money Newsletter for weekly financial insights tailored specifically to optometrists.
- Have Questions? CLICK HERE to schedule a short introductory call
The Optometry Money Podcast is dedicated to helping optometrists make better decisions around their money, careers, and practices. The show is hosted by Evon Mendrin, CFP®, CSLP®, owner of Optometry Wealth Advisors, a financial planning firm just for optometrists nationwide.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Evon (00:04):
Hey everybody.
Welcome back to The OptometryMoney Podcast.
We're helping ODs all over thecountry make better and better
decisions around their money,their careers, and their
practices.
I am your host, Evon Mendrin,Certified Financial Planner(TM)
practitioner, and owner ofOptometry Wealth Advisors, an
independent financial planningfirm just for optometrists
nationwide.
(00:24):
And thank you so much forlistening.
Really appreciate your time andyour attention today.
And on today's episode, we aregoing to have another week's
conversation about Student loansbecause the Department of
Education surprised us all onceagain by announcing, uh, just
after my last podcast episodewent live, that they're going to
(00:46):
be restarting interest accrualon the SAVE forbearance.
And the SAVE forbearance issomething we've been dealing
with for quite a while now ascourt cases have been going
through the process of trying todetermine whether the SAVE plan
was legitimate and eligible toexist or able to exist or not.
And so that forbearance has beeninterest free.
(01:08):
That meaning interest has notbeen charged, has not been
accruing as it would on atypical forbearance.
but that is changing as ofAugust 1st.
As the Department of Educationannounced that starting August
1st interest will begin accruingonce again for those of you that
are on the SAVE forbearance, andthere's been a lot of confusion
(01:28):
in terms of what's happening.
Is this connected to the lawthat was just passed, was it
not?
What seems to be happening isthere are two separate things
going on at once.
Uh, the first thing that's goingon is that, The One Big
Beautiful BIll Act, the OBBBA?
OBBBA?
O3B?, I don't know.
We'll workshop that.
the new law that was just signedthe week of July 4th, made
(01:52):
sweeping major changes toincome-driven repayment plans,
for federal student loans if youdidn't listen to last week's
episode where I dove into thatbill.
what's happening is that forcurrent borrowers, for current
optometrists that have graduatedand will not take out new loans
after July 1st, 2026, What'shappening is that as of July
1st, 2026, ICR.
(02:14):
Pay As You Earn, and SAVE willno longer exist as options for
income-driven repayment plans.
instead they will be replaced bya modified version of IBR, which
currently exists and they arekeeping the new and the old
version of IBR or the brand newrepayment assistance plan, which
isn't available right now.
(02:35):
Probably won't be available tillmid next year, 2026.
However, for those that arecurrently graduated
optometrists, and you won't betaking out new student loans
after July 1st, 2026, orconsolidating your loans, you
get a few years to transitioninto the new loan options.
So if you are, well currently onthe SAVE forbearance, if you are
(02:59):
on Pay As You Earn, you havesome time specifically up until
July 1st, 2028.
To eventually decide which ofthe new options you're gonna be
choosing, whether it's going forsome sort of standard repayment
plan, whether it's the new RAPplan with a 30 year timeline to
forgiveness, or whether it's theversion of IBR that you qualify
for.
(03:19):
And if you're on extended orgraduated, or standard
repayment, you can remain onthese as long as you don't
consolidate or take out newloans.
After July 2026.
and so there's this major changeas a part of the new law and
there's this sort of transitionover the next three years or so
into the newly available paymentoptions, uh, for those that are
currently graduatedoptometrists.
(03:40):
So that's the first thing that'shappened.
And then separately, and inaddition to that last week, the
Department of Education said,Hey.
August 1st, we are going tostart again the interest accrual
on the SAVE forbearance.
The forbearance itself willcontinue, remember until these
court cases resolved and thecourts say something most likely
(04:01):
shutting down the repaymentplan.
The forbearance will continueon.
What will change is that it's nolonger going to be interest
free.
Interest will begin to accrue.
And so, what should we do then?
Right?
If you are on the SAVEforbearance, the question is
what should we do?
Well, I, I don't knowspecifically what your situation
is, but here's some generalthoughts around how we should
think about this.
(04:21):
Number one, if you are planningto pay down your debt
altogether, the party's over,unfortunately, right?
You've been enjoying for years,really, no interest on your
student loans, and you've beenenjoying this forbearance under
the SAVE plan for quite a whilenow.
And so you have to start makingsome decisions whether it's
going to be sticking on one ofthe standard plans, in the
(04:43):
federal student loan system,whether it's going to be
refinancing out the federalstudent loan system again,
depending on the interest ratesthat you have.
you'd want to look for ameaningful enough difference in
interest rates.
if you're going to refinanceoutta the federal student loan
system and lose all of theprotections and flexibility
inside of it, but you need tostart making some decisions of
(05:03):
what you're gonna do.
But at the end of the day, theIDR plans don't necessarily
impact you too much.
You're gonna be paying it downanyways.
what if you're going forforgiveness, whether it's.
Public service loan forgivenessor whether it's a taxable type
forgiveness over, what will be20 or 25 or 30 years, if you're
on the RAP plan.
(05:24):
There really is no major reasonto remain on the SAVE
forbearance.
You're probably over the nextmonth going to be, switching to
the most relevant.
IDR plan that's available foryou.
And if you're going for PSLF,yes, you can technically count
on the buyback program for thesemonths, but it's possible since
(05:45):
this forbearance has lasted forover a year, they can still ask
for tax returns for these monthsanyways.
and so, there's really no reasonto continue on.
you should plan on switching toeither IBR and, If you were a
new borrower before July 1st,2014, meaning you took out your
first federal loans before July1st, 2014, you are eligible only
(06:09):
for the old income-basedrepayment plan, and that has a
25 year timeline to taxableforgiveness and a 15% of
discretionary income loanpayment calculation.
So it's kind of the leastfavorable, uh, of the options
here.
If you're going for PSLF andyou're eligible for Pay As You
Earn, meaning you were a newborrower after October, of 2007
(06:31):
and you took out another loan in2011, if you're eligible for Pay
As You Earn, you're probablygonna wanna hop onto Pay As You
Earn for the next three years.
And then hop onto IBR when youabsolutely need to, and if you
are a new borrower after July1st, 2014, that means you're
eligible for the much better newversion of IBR, which was a 20
(06:52):
year timeline to taxableforgiveness.
Uh, but importantly a 10% ofdiscretionary loan calculation.
So this is essentially a twinfor Pay As You Earn.
If you're eligible for that,you're just gonna go straight to
that anyways.
What if you're going for ataxable type loan forgiveness?
Well, assuming you've reran themath with these new options that
(07:12):
are gonna be available in 2028and beyond.
and it still made sense to youbased on either the math itself
or your circumstances based onyour cashflow priorities to go
for a taxable forgiveness.
What are your options?
Well, you're probably gonna moveon to the income-driven
repayment plan that is mostappropriate for you.
Again, if you are a new borrowerafter July 1st, 2014, and you're
(07:35):
eligible for new version of IBR.
That's the best optionavailable, frankly.
if you were a new borrower afterOctober, 2007 and you are
eligible for Pay As You Earn,that's probably what you're
gonna be considering over thenext three years at least.
And then for everyone else,meaning you took out your first
federal loans before fall of2007.
(07:56):
Your only eligible option hereis old version of income-based
repayment.
unless you absolutely cannotafford the payments, which is
possible because as we thinkabout it it's possible many of
you haven't had to recertifyyour income, re-show your income
for several years.
and you may now have to, ifyou've switched repayment plans.
(08:18):
You may now have to recertifyyour income and show higher,
more recent income, which isgonna lead to a, potentially
much higher, student loanpayment.
and so, you know, there may besome of you out there where it's
gonna be a pretty strong crunchin cash flow, and you have to
make some decisions in the shortterm of what to do.
It's also important to point outthat if you are, if you are
(08:39):
reser, if you are changingrepayment plans, they're going
to ask for your most recentlyfiled tax return.
And for those of you that hadfiled an extension for 2024's
tax return, that's still goingto be your 2023 tax return.
So that tax planning issomething I've been talking
about through the year, early inthe year.
As you know, through this all,all this uncertainty, it may
(08:59):
make sense for some of you tofile that extension so you have
more time to use a previousyear's tax return, if, if that
made sense.
So keep that in mind, and thenonce that transition to the new
plan is finalized, once that hasbeen processed, you can then go
ahead and file that 2024 taxreturn.
And moving forward, both ofthese options, the IBR options
as well as the RAP plan, stillallow married filing separately.
(09:23):
And so all of those strategiesrelated to filing taxes
separately, excluding yourspouse's income, especially in
community property states, allof those are still very valid
and maybe become more importantmoving forward here.
And as well as just really goodtax planning.
'Cause a lot of this isdetermined based on your income,
particularly your adjusted grossincome as the default starting
(09:45):
point.
But if you're able to afford thenext payment.
And you're going for some typeof forgiveness, or if you're
just paying it back, you're mostlikely going to be moving off of
the SAVE forbearance onto thenext most appropriate option.
The exact option may look verydifferent for everyone, but
that's most likely what you'regonna be doing.
so I just wanted to have anepisode about this.
(10:06):
I didn't really get to talkabout this in depth in the last
episode.
wanted to give this topic sometime as well.
And of course, as things areactually implemented from this
new law that just passed,because it's one thing to see it
enacted into a law.
It's another thing to see how itwill actually be implemented.
All of the different tax andstudent loan aspects of it.
As things are clarified, as newnews comes up, I'll be sure to
(10:30):
put that all on Future podcastepisodes or if you wanna read
about it as I write about thesethings each and every week, I'll
put a link in the show notes tosign up for our weekly Eyes on
the Money newsletter.
you can follow along each andevery week as I write about
these topics and more.
And as you do that, you'll alsoget a One page PDF guide to all
of the tax changes that we'reexpecting from the new bill as
(10:51):
well.
And then lastly, if you want totalk through these decisions
with somebody, both on thestudent loan side, if you wanna
talk through how new taxprovisions or extensions impact
you as an optometrist andOptometry practice owner, Uh,
reach out.
I'll have a link in the shownotes and you can schedule a
time to have a no pressure, nocommitment introductory call.
We can talk about what's on yourmind financially, and I can
(11:12):
share how I help otheroptometrists navigate those same
topics, those same issues allover the country.
And so, with that, appreciateyour time.
We'll catch you on the nextepisode.
In the meantime, take care.
Hey everybody.
Welcome back to The OptometryMoney Podcast.
We're helping ODs all over thecountry make better and better
decisions around their money,their careers, and their
practices.
I am your host, Evon Mendrin,Certified Financial Planner(TM)
practitioner, and owner ofOptometry Wealth Advisors, an
independent financial planningfirm just for optometrists
nationwide.
(00:24):
And thank you so much forlistening.
Really appreciate your time andyour attention today.
And on today's episode, we aregoing to have another week's
conversation about Student loansbecause the Department of
Education surprised us all onceagain by announcing, uh, just
after my last podcast episodewent live, that they're going to
(00:46):
be restarting interest accrualon the SAVE forbearance.
And the SAVE forbearance issomething we've been dealing
with for quite a while now ascourt cases have been going
through the process of trying todetermine whether the SAVE plan
was legitimate and eligible toexist or able to exist or not.
And so that forbearance has beeninterest free.
(01:08):
That meaning interest has notbeen charged, has not been
accruing as it would on atypical forbearance.
but that is changing as ofAugust 1st.
As the Department of Educationannounced that starting August
1st interest will begin accruingonce again for those of you that
are on the SAVE forbearance, andthere's been a lot of confusion
(01:28):
in terms of what's happening.
Is this connected to the lawthat was just passed, was it
not?
What seems to be happening isthere are two separate things
going on at once.
Uh, the first thing that's goingon is that, The One Big
Beautiful BIll Act, the OBBBA?
OBBBA?
O3B?, I don't know.
We'll workshop that.
the new law that was just signedthe week of July 4th, made
(01:52):
sweeping major changes toincome-driven repayment plans,
for federal student loans if youdidn't listen to last week's
episode where I dove into thatbill.
what's happening is that forcurrent borrowers, for current
optometrists that have graduatedand will not take out new loans
after July 1st, 2026, What'shappening is that as of July
1st, 2026, ICR.
(02:14):
Pay As You Earn, and SAVE willno longer exist as options for
income-driven repayment plans.
instead they will be replaced bya modified version of IBR, which
currently exists and they arekeeping the new and the old
version of IBR or the brand newrepayment assistance plan, which
isn't available right now.
(02:35):
Probably won't be available tillmid next year, 2026.
However, for those that arecurrently graduated
optometrists, and you won't betaking out new student loans
after July 1st, 2026, orconsolidating your loans, you
get a few years to transitioninto the new loan options.
So if you are, well currently onthe SAVE forbearance, if you are
(02:59):
on Pay As You Earn, you havesome time specifically up until
July 1st, 2028.
To eventually decide which ofthe new options you're gonna be
choosing, whether it's going forsome sort of standard repayment
plan, whether it's the new RAPplan with a 30 year timeline to
forgiveness, or whether it's theversion of IBR that you qualify
for.
(03:19):
And if you're on extended orgraduated, or standard
repayment, you can remain onthese as long as you don't
consolidate or take out newloans.
After July 2026.
and so there's this major changeas a part of the new law and
there's this sort of transitionover the next three years or so
into the newly available paymentoptions, uh, for those that are
currently graduatedoptometrists.
(03:40):
So that's the first thing that'shappened.
And then separately, and inaddition to that last week, the
Department of Education said,Hey.
August 1st, we are going tostart again the interest accrual
on the SAVE forbearance.
The forbearance itself willcontinue, remember until these
court cases resolved and thecourts say something most likely
(04:01):
shutting down the repaymentplan.
The forbearance will continueon.
What will change is that it's nolonger going to be interest
free.
Interest will begin to accrue.
And so, what should we do then?
Right?
If you are on the SAVEforbearance, the question is
what should we do?
Well, I, I don't knowspecifically what your situation
is, but here's some generalthoughts around how we should
think about this.
(04:21):
Number one, if you are planningto pay down your debt
altogether, the party's over,unfortunately, right?
You've been enjoying for years,really, no interest on your
student loans, and you've beenenjoying this forbearance under
the SAVE plan for quite a whilenow.
And so you have to start makingsome decisions whether it's
going to be sticking on one ofthe standard plans, in the
(04:43):
federal student loan system,whether it's going to be
refinancing out the federalstudent loan system again,
depending on the interest ratesthat you have.
you'd want to look for ameaningful enough difference in
interest rates.
if you're going to refinanceoutta the federal student loan
system and lose all of theprotections and flexibility
inside of it, but you need tostart making some decisions of
(05:03):
what you're gonna do.
But at the end of the day, theIDR plans don't necessarily
impact you too much.
You're gonna be paying it downanyways.
what if you're going forforgiveness, whether it's.
Public service loan forgivenessor whether it's a taxable type
forgiveness over, what will be20 or 25 or 30 years, if you're
on the RAP plan.
(05:24):
There really is no major reasonto remain on the SAVE
forbearance.
You're probably over the nextmonth going to be, switching to
the most relevant.
IDR plan that's available foryou.
And if you're going for PSLF,yes, you can technically count
on the buyback program for thesemonths, but it's possible since
(05:45):
this forbearance has lasted forover a year, they can still ask
for tax returns for these monthsanyways.
and so, there's really no reasonto continue on.
you should plan on switching toeither IBR and, If you were a
new borrower before July 1st,2014, meaning you took out your
first federal loans before July1st, 2014, you are eligible only
(06:09):
for the old income-basedrepayment plan, and that has a
25 year timeline to taxableforgiveness and a 15% of
discretionary income loanpayment calculation.
So it's kind of the leastfavorable, uh, of the options
here.
If you're going for PSLF andyou're eligible for Pay As You
Earn, meaning you were a newborrower after October, of 2007
(06:31):
and you took out another loan in2011, if you're eligible for Pay
As You Earn, you're probablygonna wanna hop onto Pay As You
Earn for the next three years.
And then hop onto IBR when youabsolutely need to, and if you
are a new borrower after July1st, 2014, that means you're
eligible for the much better newversion of IBR, which was a 20
(06:52):
year timeline to taxableforgiveness.
Uh, but importantly a 10% ofdiscretionary loan calculation.
So this is essentially a twinfor Pay As You Earn.
If you're eligible for that,you're just gonna go straight to
that anyways.
What if you're going for ataxable type loan forgiveness?
Well, assuming you've reran themath with these new options that
(07:12):
are gonna be available in 2028and beyond.
and it still made sense to youbased on either the math itself
or your circumstances based onyour cashflow priorities to go
for a taxable forgiveness.
What are your options?
Well, you're probably gonna moveon to the income-driven
repayment plan that is mostappropriate for you.
Again, if you are a new borrowerafter July 1st, 2014, and you're
(07:35):
eligible for new version of IBR.
That's the best optionavailable, frankly.
if you were a new borrower afterOctober, 2007 and you are
eligible for Pay As You Earn,that's probably what you're
gonna be considering over thenext three years at least.
And then for everyone else,meaning you took out your first
federal loans before fall of2007.
(07:56):
Your only eligible option hereis old version of income-based
repayment.
unless you absolutely cannotafford the payments, which is
possible because as we thinkabout it it's possible many of
you haven't had to recertifyyour income, re-show your income
for several years.
and you may now have to, ifyou've switched repayment plans.
(08:18):
You may now have to recertifyyour income and show higher,
more recent income, which isgonna lead to a, potentially
much higher, student loanpayment.
and so, you know, there may besome of you out there where it's
gonna be a pretty strong crunchin cash flow, and you have to
make some decisions in the shortterm of what to do.
It's also important to point outthat if you are, if you are
(08:39):
reser, if you are changingrepayment plans, they're going
to ask for your most recentlyfiled tax return.
And for those of you that hadfiled an extension for 2024's
tax return, that's still goingto be your 2023 tax return.
So that tax planning issomething I've been talking
about through the year, early inthe year.
As you know, through this all,all this uncertainty, it may
(08:59):
make sense for some of you tofile that extension so you have
more time to use a previousyear's tax return, if, if that
made sense.
So keep that in mind, and thenonce that transition to the new
plan is finalized, once that hasbeen processed, you can then go
ahead and file that 2024 taxreturn.
And moving forward, both ofthese options, the IBR options
as well as the RAP plan, stillallow married filing separately.
(09:23):
And so all of those strategiesrelated to filing taxes
separately, excluding yourspouse's income, especially in
community property states, allof those are still very valid
and maybe become more importantmoving forward here.
And as well as just really goodtax planning.
'Cause a lot of this isdetermined based on your income,
particularly your adjusted grossincome as the default starting
(09:45):
point.
But if you're able to afford thenext payment.
And you're going for some typeof forgiveness, or if you're
just paying it back, you're mostlikely going to be moving off of
the SAVE forbearance onto thenext most appropriate option.
The exact option may look verydifferent for everyone, but
that's most likely what you'regonna be doing.
so I just wanted to have anepisode about this.
(10:06):
I didn't really get to talkabout this in depth in the last
episode.
wanted to give this topic sometime as well.
And of course, as things areactually implemented from this
new law that just passed,because it's one thing to see it
enacted into a law.
It's another thing to see how itwill actually be implemented.
All of the different tax andstudent loan aspects of it.
As things are clarified, as newnews comes up, I'll be sure to
(10:30):
put that all on Future podcastepisodes or if you wanna read
about it as I write about thesethings each and every week, I'll
put a link in the show notes tosign up for our weekly Eyes on
the Money newsletter.
you can follow along each andevery week as I write about
these topics and more.
And as you do that, you'll alsoget a One page PDF guide to all
of the tax changes that we'reexpecting from the new bill as
(10:51):
well.
And then lastly, if you want totalk through these decisions
with somebody, both on thestudent loan side, if you wanna
talk through how new taxprovisions or extensions impact
you as an optometrist andOptometry practice owner, Uh,
reach out.
I'll have a link in the shownotes and you can schedule a
time to have a no pressure, nocommitment introductory call.
We can talk about what's on yourmind financially, and I can
(11:12):
share how I help otheroptometrists navigate those same
topics, those same issues allover the country.
And so, with that, appreciateyour time.
We'll catch you on the nextepisode.
In the meantime, take care.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Cardiac Cowboys
The heart was always off-limits to surgeons. Cutting into it spelled instant death for the patient. That is, until a ragtag group of doctors scattered across the Midwest and Texas decided to throw out the rule book. Working in makeshift laboratories and home garages, using medical devices made from scavenged machine parts and beer tubes, these men and women invented the field of open heart surgery. Odds are, someone you know is alive because of them. So why has history left them behind? Presented by Chris Pine, CARDIAC COWBOYS tells the gripping true story behind the birth of heart surgery, and the young, Greatest Generation doctors who made it happen. For years, they competed and feuded, racing to be the first, the best, and the most prolific. Some appeared on the cover of Time Magazine, operated on kings and advised presidents. Others ended up disgraced, penniless, and convicted of felonies. Together, they ignited a revolution in medicine, and changed the world.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.