After two years of legal battles and confusion for student loan borrowers, a popular student loan repayment plan will be shut down — forcing over 7 million borrowers to find a new option.
On Friday the Department of Education alerted borrowers on the federal Saving on a Valuable Education plan that they would need to switch to a different federal repayment plan by the end of September.
The SAVE plan was implemented during the Biden administration, and offered lower monthly payments than other income-driven repayment plans. It also offered the opportunity for faster loan forgiveness.
Some 7.5 million borrowers are currently on the SAVE plan, according to the ED. Those borrowers have been in forbearance as the plan was challenged in the courts — meaning many borrowers will be making their first student loan payments since July 2024.
“Today’s guidance, which every borrower enrolled in the defunct SAVE Plan will receive over the next week, puts the Biden administration’s illegal student loan bailout agenda to rest once and for all,” said Under Secretary of Education Nicholas Kent in a press release.
“For years, borrowers have been caught in a confusing cycle of uncertainty, but the Trump administration’s policy is simple: if you take out a loan, you must pay it back. Borrowers currently enrolled in the illegal SAVE Plan will be given at least 90 days to enter a legal repayment plan of their choice, including the new Repayment Assistance Plan, which will launch on July 1,” Kent said.
On July 1, servicers will reach out to affected borrowers with instructions to leave SAVE and enroll in a new repayment option within 90 days. Borrowers will be able to enroll in a new repayment plan during any point in that time period. If borrowers do not enroll in a new repayment plan, they will be automatically enrolled in the tiered standard plan.
This comes after a tumultuous back-and-forth series of court cases determining the legality of SAVE.
“We appreciate that ED plans to wait to transition borrowers until after new repayment plans are up and running this summer, but remain concerned that ED is not prepared to smoothly manage such a major transition,” said Michele Zampini, The Institute for College Access and Success’ (TICAS) associate vice president of policy and advocacy.
“ED must prioritize clear, timely, and consistent communication to borrowers, and must also ensure servicers have enough time to get their systems ready to correctly process applications and provide adequate customer support,” Zampini said. “If this takes longer than ED initially plans, ED must give borrowers more time and flexibility and hold borrowers harmless for any processing delays.”
A September 2025 survey by Data for Progress and commissioned by TICAS found that 42% of borrowers were making tradeoffs between their loan payments and paying for basic needs. Additionally, 58% of the borrowers surveyed said they had little trust in the U.S. government helping keep their loans affordable.
According to the survey, borrowers also demonstrated a lack of awareness of the repayment options available to them: 15% said they’ve heard “nothing at all” about income-based repayment plans, and 51% had heard “a little.”
New repayment plans
Under the One Big Beautiful Bill Act, any new student loan taken out after July 1, 2026 will only be able to be repaid through a standard repayment plan, or the Repayment Assistance Plan. Let’s break down what each of those plans mean for you.
- Tiered standard plan: A basic repayment plan with fixed monthly payment amounts and a repayment length of 10-25 years depending on your total student loan balance.
- Repayment Assistance Plan (RAP): RAP offers minimum payments regardless of income, 30 years until forgiveness, and payment amounts based on earning level.
Current SAVE plan borrowers are eligible for some existing repayment plans because they took out loans prior to July 1, 2026. They new repayment options for current SAVE borrowers include:
If you choose to switch to an ICR or PAYE plan, you will need to switch again before July 1, 2028, as those plans will be going away after that time.
Selecting the best loan repayment plan for you is a personal decision. You should consider if you want to pay the lowest monthly payment amount — which may be ICR or PAYE until July 2028 — or if you want the plan that will have you paying debt back the fastest. If you don’t want to have to change plans again before July 2028, you should consider IBR, RAP, or the standard plan.
What should I do next?
If you are currently on the SAVE plan, look for any communications from the ED and reach out to your loan servicer for any additional clarification. Begin to consider what repayment option will work best for you.
Initial emails started going to borrowers on March 27, informing them a decision must be made within 90 days of July 1. After those 90 days, SAVE members will be automatically enrolled in the standard repayment plan.
Borrowers looking to change repayment plans have the option to provide consent to the ED to access their federal tax information directly from the Internal Revenue Service, which means borrowers won’t have to manually upload that information.
“The best thing borrowers can do is stay informed and be proactive: make sure you have access to your loan account, know which plan you’re in, what you owe, and who your servicer is, and use resources such as the ED’s repayment calculator to compare your plan options,” said Zampini.
The article End Finally Comes for SAVE Student Loan Plan: Millions Given Deadline to Switch originally appeared on NerdWallet.
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