Millions of federal student loan borrowers enrolled in the Saving on a Valuable Education plan are facing a transition period as the program is being phased out following legal challenges and legislative action. The Trump administration directed borrowers to switch to alternative repayment options, with the earliest transition deadline set for September 29. However, loan servicers are issuing notifications in staggered waves, meaning many borrowers have additional time beyond this initial date, with some receiving alerts through October.
More than 6.9 million borrowers remained in the SAVE plan as of March, carrying an average debt of approximately $55,000. The program previously offered very low monthly payments based on income, but borrowers have not made payments for over two years while the plan faced legal scrutiny. During this period, their outstanding debt has accumulated interest, and their progress toward loan forgiveness has halted.
Borrowers who fail to select an alternative repayment plan within their 90-day window will be automatically transferred to either the Standard Repayment Plan or the new Tiered Standard Plan, which divide total debt into fixed monthly payments over a set term. According to expert analysis, this shift could result in payments doubling or tripling for some borrowers. For comparison, a household earning just over $50,000 with $60,000 in debt could pay $690 monthly under the Standard Repayment Plan compared to $158 under the newer Repayment Assistance Plan.
Borrowers seeking lower payments should consider enrolling in alternative income-driven repayment plans available through studentaid.gov or their loan servicer’s website. The Repayment Assistance Plan, launched in July, caps payments between 1% and 10% of earnings and includes benefits such as a $50 monthly discount per qualifying dependent. Financial advisors recommend borrowers calculate potential payments under alternative plans immediately and adjust their budgets accordingly to avoid payment shock when the transition occurs.
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