Loan servicers have initiated a mandatory transition process for borrowers currently enrolled in the Saving on a Valuable Education (SAVE) plan, with notifications and deadlines beginning in July. The action follows a federal appeals court order mandating the plan’s termination. According to data analyzed by higher education expert Mark Kantrowitz, approximately 6.9 million borrowers remained in SAVE as of March, carrying an average debt load near $55,000.
Borrowers will receive individualized notices from their servicers, with the earliest exit deadline set for September 29. However, most borrowers will receive additional time, as loan servicers are staggering notifications across the coming months. For example, one major servicer indicated it would reach out to nearly three million borrowers in waves between July 2026 and March 2027. Upon receiving notification, borrowers will have 90 days to select an alternative repayment plan through their Federal Student Aid account. Those who fail to make an active selection within this timeframe will be automatically enrolled in either the Standard Repayment Plan or the newly introduced Tiered Standard Plan, both of which became available July 1.
Several repayment alternatives are available to departing SAVE enrollees. The newly introduced Repayment Assistance Plan (RAP) offers income-driven payments ranging from 1% to 10% of earnings with a $10 minimum monthly payment and includes a $50 monthly discount per qualifying dependent. Existing income-driven repayment plans remain accessible, including the Income-Based Repayment plan (IBR), which caps payments at 10% of discretionary income for newer borrowers. The Income-Contingent Repayment and Pay As You Earn plans continue available through July 1, 2028, though they no longer provide forgiveness pathways.
Experts emphasize the importance of proactive planning, as automatic placement in Standard plans typically results in the highest monthly payments. Borrowers who miss transition deadlines but face unaffordable payments can still apply for income-driven repayment plans afterward. However, failure to maintain payments after exiting SAVE could trigger loan delinquency and eventual default, potentially leading to wage garnishment and other collection actions, though the timing of resumed enforcement remains unclear under the current administration.
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