Millions of federal student loan borrowers enrolled in the SAVE income-driven repayment plan must transition to alternative repayment programs or face significantly increased monthly payments. The Trump administration initiated the phase-out of SAVE, which was created during the Biden administration but subsequently overturned through legal challenges and legislation. Borrowers are being given approximately 90 days from notification to select a new repayment option, with the earliest deadline falling on Sept. 29.
As of March, more than 6.9 million borrowers remained in SAVE with an average debt of approximately $55,000. Loan servicers are distributing notifications in staggered waves throughout the transition period, with some notifications extending through October or later in the year. Borrowers should verify their specific deadline by checking their servicer accounts and studentaid.gov, as timelines vary depending on which servicer manages their loans.
Borrowers who fail to select a new repayment plan within their 90-day window will be automatically enrolled in either the Standard Repayment Plan or the new Tiered Standard Plan, both of which calculate payments as fixed amounts based on loan balance rather than income. Analysts warn that monthly payments under these default options could double or triple compared to SAVE’s structure. During the SAVE period, many borrowers made minimal or no payments while their debt accumulated interest and forgiveness progress stalled.
Alternative income-driven repayment plans remain available, including the Repayment Assistance Plan launched in July, which caps payments at 1 to 10 percent of earnings and includes loan forgiveness after 30 years. Income-based plans offer substantially lower monthly obligations than standard repayment schedules. The Education Department is processing a backlog of more than 530,000 income-driven repayment applications, which may cause delays in enrollment. Financial advisors recommend that affected borrowers calculate their payment obligations under alternative plans immediately and budget accordingly to prepare for the transition.
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