The SAVE plan was created in 2023 and was the most affordable student loan repayment option, but it was challenged in court and is now being eliminated by the Department of Education. This article covers what the 7 million people enrolled in the SAVE plan need to know now that the SAVE plan is ending.
- Why is the Department of Education eliminating the SAVE plan?
- What do I need to know if I’m already on the SAVE Plan?
- How do I pick a new plan?
- Do I have to wait until July 1 to change plans?
- What happens if I’m moved to a plan with payments I can’t afford?
Why is the Department of Education eliminating the SAVE plan?
The Department of Education agreed to eliminate the plan to settle a lawsuit brought by Missouri and several other states. The Department also requested that the court enter judgment for Missouri and vacate most of the 2023 rules that created the SAVE plan. On March 10, 2026, a federal court entered the judgment and order as the Department requested.
What do I need to know if I’m already on the SAVE Plan?
You will not be able to stay in the SAVE plan for long. You will need to enroll in a different repayment plan soon, likely within 90 days of July 1, 2026. The Department has announced that loan servicers will begin sending notices to borrowers enrolled in SAVE on or around July 1, 2026, telling them to enroll in a different repayment plan within 90 days. This means you will probably need to switch plans by the end of September 2026.
Note: You may also have received emails from the Department of Education in March or April 2026 warning you about these upcoming changes, but the 90-day deadline for switching plans should not start until servicer emails are sent sometime around July 1.
If you do not enroll in a different repayment plan by the end of your 90-day period, the Department has said you will be automatically reassigned to another plan, likely the Standard Repayment Plan. Payments in the Standard plan are based on the borrower’s loan balance, not their income, and are often much higher than payments in SAVE or other income-driven repayment plans.
After switching plans, you will start getting monthly bills. You will be required to make payments unless you qualify for a $0 payment in your new plan or you request a forbearance or deferment to postpone payments.
How do I pick a new plan?
If you are currently in SAVE and must switch plans, you can use our website to learn more about other repayment options and how to think about choosing a plan. Explore other income-driven repayment (IDR) options that base your monthly payments on your income and family size:
- Income-Based Repayment (IBR),
- Pay As You Earn (PAYE), and
- Income-Contingent Repayment (ICR)
Each of these IDR plans have different eligibility criteria, but they all base payments on income and family size and promise cancellation of any remaining debt after 20 to 25 years in repayment. Depending on your income and family size, your payments may be as low as $0 per month in these plans.
You may also be interested in the Repayment Assistance Plan (RAP), a new income-driven repayment plan that will be available on July 1. RAP is different from the other IDR plans:
- It uses a different formula to calculate payments, and does not offer $0 payments no matter how low your income is.
- It has the longest repayment period before any remaining debt is cancelled (30 years).
- It provides more help to make progress in paying down your loans: it cancels any interest not covered by your monthly payment (like SAVE did) and it provides a small principal reduction of up to $50 per month for some borrowers.
RAP may be a good fit for you if you want to fully pay off your loans and you want to get any interest not covered by your monthly payments cancelled. However, RAP may not be a good option for you if you are low-income, because you may face higher monthly bills and be in repayment for a longer period of time before your loans are cancelled.
Other options include the Standard and Extended plans, which set payments based on the amount of your loan balance and require you to fully repay your loans within a set number of years. Typically borrowers finish repayment sooner but have higher monthly payments in the Standard Plan than in IDR plans.
You can use the government’s Loan Simulator to estimate your monthly payments, the total amount you’ll pay, and the period you’ll pay in each of the repayment plans that you are eligible for. Right now, Loan Simulator does not provide payment estimates for the RAP plan, but you can use the nonprofit EDCAP’s calculator to estimate your payments in RAP.
You can apply for income-driven repayment plans online at studentaid.gov.
Do I have to wait until July 1 to change plans?
No, you do not have to wait to switch plans. You can apply for a new plan now, but you cannot yet request the Repayment Assistance Plan (RAP) because it is a new plan that will not be available until July 1.
It might make sense to switch plans now if:
- you are able to afford payments in another plan, and
- you want to begin making progress toward paying off your loan or toward loan forgiveness through Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment.
On the other hand, it might make sense to wait until July 1 to switch plans if:
- you want to enroll in RAP, which won’t be available until July 1, or
- you do not qualify for a $0 payment in another plan and cannot afford the payments you would owe in other plans.
Waiting until July 1 will give you more time before you need to make payments, but be aware that interest will continue to be charged while you wait.
Once you have been accepted into a new repayment plan, you should expect to start receiving bills again unless you are eligible for a $0 payment in your new IDR plan.
Note: SAVE was the most affordable repayment plan, and your monthly bills in SAVE were probably based on your income from two or more years ago. Your new payments will most likely be higher in whatever plan you switch to, both because other plans are more expensive than SAVE and because your payments will likely be based on more recent income, which may have gone up.
What happens if I’m moved to a plan with payments I can’t afford?
If you realize you cannot afford your new plan – regardless of whether you chose your plan or were automatically switched by the Department – you have options.
First, you can request to switch plans again. Use the Loan Simulator or call your servicer to see whether there is another plan you can afford or that makes more sense for your financial situation.
Second, if you cannot afford your payment in any plan,you can request a temporary forbearance. A forbearance will temporarily stop your payments and keep your loan from becoming delinquent or defaulting. But, forbearances have downsides: there are limits on how long you can be in forbearance, and interest will continue to be charged to your loan while in forbearance — so how much you owe will increase. Forbearances are a temporary fix, not a long term solution, but they can buy time to figure out how you’ll manage your loans.
For official government information about the plan to eliminate SAVE, borrowers can visit the Department of Education’s website.
For more background about the history of the SAVE plan and the lawsuits surrounding it, see our previous blog posts on this issue.
