The countdown to the closure of the SAVE plan has at last begun. The student loan repayment plan, which aimed to offer lower monthly payments and a faster path toward forgiveness for borrowers, almost immediately faced pushback when introduced by the Biden administration in 2023, with several Republican-led states suing. For a while, this ongoing legal battle left borrowers in limbo. But with the recent arrival of a decisive, plan-ending judgment, followed by a deadline set by the Trump administration for those who are enrolled to exit, borrowers are now in a position where they must take action.
What is happening to the SAVE plan?
After a roughly two-year legal battle, a decisive judgment has arrived for the federal SAVE, or Saving on a Valuable Education, plan. As of March, the “Eighth Circuit Court of Appeals put an end to a legal challenge of the SAVE student loan repayment plan and instructed a district court to approve a proposed settlement between the Trump administration and the state of Missouri that would end the program,” said Yahoo Finance. In short, the program is “permanently eliminated.”
Following this, the Department of Education sent out a notice informing borrowers “they would need to switch to a different federal repayment plan by the end of September,” said NerdWallet. As of that announcement, “over 7 million borrowers” were still enrolled in the plan, which “offered lower monthly payments than other income-driven repayment plans,” as well as the opportunity for faster loan forgiveness.
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What will happen to borrowers enrolled in SAVE?
Up until this point, while litigation has been ongoing, borrowers enrolled in the SAVE plan have been in “an administrative forbearance without payments due since the plan was challenged in court in the summer of 2024,” said CNBC, though interest began accruing in August 2025. But as of July 1, these remaining enrollees can expect to receive an email from their servicer instructing them to leave the SAVE plan and offering instructions for how to enroll in another repayment option. They will have 90 days to do so, or until the end of September.
Those who do not switch over will be automatically enrolled in the 10-year standard plan, “which would result in considerably higher payments in many cases,” said U.S. News & World Report.
What alternative repayment plan options do borrowers have?
With SAVE now officially off the table, borrowers have the option of existing income-based repayment plans, which can offer more affordable payments than the standard 10-year repayment plan. Another option is to wait to enroll in RAP, or the Repayment Assistance Plan, a new repayment plan established under Trump’s One Big Beautiful Bill Act. This plan moderates payments based on income, though a minimum payment is required, and offers forgiveness after a longer period of 30 years.
Regardless of the option borrowers choose, “it’s likely that any new plan will mean higher payments,” said U.S. News & World Report. The SAVE plan “was the most affordable option for most people.”
