Loan servicers commenced notifying borrowers enrolled in the Saving on a Valuable Education plan that they must transition to alternative repayment arrangements within a 90-day window, following a federal appeals court decision to terminate the program earlier in the year. More than 6.9 million borrowers held SAVE accounts as of March, carrying average balances near $55,000, though enrollment has declined from approximately 7.7 million a year prior.
The earliest exit deadline is set for September 29, according to a Department of Education court filing from June 25. However, notification timelines vary by loan servicer, with some borrowers receiving notices across multiple months throughout the remainder of the year and into early 2027. Once borrowers receive their specific notification, they have 90 days to select an alternative plan. Borrowers need not wait for formal notice and can proactively initiate plan changes through their Federal Student Aid accounts at StudentAid.gov.
Borrowers who fail to select a new plan within 90 days of notification will be automatically enrolled in either the Standard Repayment Plan or the newly introduced Tiered Standard Plan, which became effective July 1. These automatic placements typically result in higher monthly payments compared to income-driven alternatives. Options available to borrowers include the recently launched Repayment Assistance Plan, which bases monthly payments on earnings at rates between 1% and 10% with a $10 minimum, leading to forgiveness after 30 years. Other income-driven plans remain available, including the Income-Based Repayment plan and others with varying payment structures and forgiveness timelines.
Borrowers who miss transition deadlines but are assigned to unaffordable plans retain the ability to apply for income-driven repayment plans later. However, failure to maintain payments on any plan carries significant consequences, including potential loan delinquency, wage garnishment, tax refund seizure, and Social Security payment garnishment after extended nonpayment periods. Experts recommend borrowers assess their specific circumstances, including income and family size, to determine the most advantageous repayment plan before deadlines expire.
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