After years of legal limbo, millions of federal student loan borrowers on the Saving on a Valuable Education (SAVE) repayment plan will finally have closure, though it may not be the result they were hoping for.
On Tuesday, a district court judge officially killed the rule behind SAVE, an income-driven repayment plan created under the Biden’s administration that was known for its generous terms and low monthly payments.
Republican attorneys general first challenged the plan during former President Joe Biden’s tenure. When President Donald Trump took office, his administration stopped contesting the suit and agreed to a settlement. A court initially dismissed the lawsuit, saying there was no case if both parties agreed, but after an appeals court stepped in, the judge ultimately agreed to vacate the rule.
In other words, if you’ve been on the SAVE plan, you’ll soon have to pick a new repayment option or eventually have an option chosen for you.
During that period of legal uncertainty, loans under the SAVE plan were put in forbearance, meaning borrowers don’t have monthly payments, but they have been accruing interest since last August.
There are still many questions about what happens next for borrowers enrolled in SAVE, experts say, including the timeline for any plan transitions.
“In the coming weeks, the Department will issue clear guidance on next steps for borrowers enrolled in the illegal SAVE Plan, including details regarding how borrowers can move into a legal repayment plan,” Education Department Under Secretary Nicholas Kent said in a statement.
Here’s what experts say borrowers in SAVE forbearance should do now.
Dust off your account and update your contact info
Your first step should be to log onto both studentaid.gov and your loan servicer’s website, said Kate Wood, lending expert at NerdWallet. Make sure you know the status of your loan and that all of your contact information is up to date.
“We don’t know how quickly this is going to move,” Wood said. “We don’t know what exactly borrowers are going to be instructed to do, but essentially if the Education Department or if your servicer has sent you information, however they sent it, they consider their job done.”
READ MORE: Major changes to student loan borrowing and repayment are coming. Here’s what to know
If they send information to an email address you’re no longer able to access or to a physical address where you no longer live, “that does not matter to them,” she added.
While you’re on the government’s website, you can compare your other repayment options with their loan simulator.
Most borrowers can expect their payments to increase after the demise of SAVE, Wood said. That’s partly because other income-driven repayment plans use less-generous formulas for calculating income.
Also, if borrowers make more now than when they enrolled years ago —even if their salaries only increased to keep up with inflation — their monthly payments will be higher.
Understand your options and deadlines
After receiving that notice from the Education Department, borrowers will likely be given a period of time to change from SAVE to another plan, said Betsy Mayotte, founder at The Institute For Student Loan Advisors.
“The big, outstanding question here is: If someone fails to change plans within the window of time they’re given, will they be put on the next lowest income-driven plan, or will they be put on a standard repayment plan?” Mayotte said.
To avoid that, it’s important to know what options are available to you, and be ready to make a selection before you’re automatically switched out. Generally, as long as you don’t take out any more loans, you’ll have access to the following plans through July 2028:
- Standard repayment plan
- Graduated repayment plan
- Extended repayment plan
- Income-Contingent Repayment (ICR)
- Pay As You Earn (PAYE)
- Income-Based Repayment (IBR)
(If you need help navigating these options, we made a guide to other upcoming changes for student loan borrowers.)
Beginning in July 2026, the department is introducing the new Repayment Assistance Program (RAP), which will replace ICR and PAYE.
School teacher Kelly Elizabeth Belt fills out paperwork to payback her student loan while trying to navigate policies under the Trump administration of, in Provo, Utah, May 30, 2025. Photo by Jim Urquhart/Reuters
If you’re pursuing income-driven forgiveness, which is plan-dependent but generally forgives your loan balance after 20 to 25 years of payments, “you should switch over ASAP because you’re just losing time,” Mayotte said, adding the months borrowers spent in SAVE forbearance will not count toward forgiveness.
They do count toward the Public Service Loan Forgiveness (PSLF) program if you’re able to use the Education Department’s buyback opportunity, which allows a borrower to pay a lump sum totaling what the department estimates the person would have paid during the period of “ineligible deferment or forbearance” if that amount is enough to complete the total number of qualifying payments.
Consider whether sticking with forbearance makes sense for now
There are reasons to stay in forbearance and wait until the department makes the choice for you, Mayotte said, such as using that reprieve from payments to target higher-interest loans, if you have them.
There’s also a small, but nonzero, chance that more litigation might aim to reinstate the Revised Pay As You Earn (REPAYE) plan, which is what SAVE replaced in October 2023, said Winston Berkman-Breen, legal director at Protect Borrowers.
“There’s the potential for some additional whiplash,” he said.
The chance that there could be more confusion ahead gives him pause about recommending across the board that people find a new payment plan.
“There’s some finality about SAVE, but that doesn’t necessarily mean there’s more clarity about how to move forward yet,” he said.
What if none of the options are affordable?
That confusion — and frustration — has led some borrowers to say they don’t intend to pay when the forbearance period ends, both Mayotte and Wood said.
After 90 days of nonpayment, the government considers borrowers delinquent, and after 270 days, they’re in default. That can have huge consequences, largely on people’s credit scores. On average, people see a three-digit credit score drop from a delinquent student loan, Wood said.
“Then if you’re looking to do something else you might want to do, notably buying a home, getting a car loan, getting a personal loan, abruptly you are a much less attractive borrower to that lender than you would have been previously,” she said.
More than 7 million borrowers were in SAVE forbearance as of the beginning of this year, and experts worry that shifting them to higher monthly payments will land many more people in delinquency and default. The federal government has said they’re not garnishing the wages of borrowers in default for now, but they haven’t said if or when they’ll restart.
According to government data, about 3.4 million Americans were more than 270 days late on a loan payment at the end of last year. In total, around 6.6 million borrowers owe almost $170 billion in federal student loans. Experts told PBS News that ending SAVE could cause a default crisis.
If you look at all your options and decide none are workable, you might want to talk with your loan servicer about entering regular forbearance or deferment, Wood added.
“For a lot of people abruptly needing to accommodate potentially a three- or four-figure monthly bill, that can force a massive lifestyle change,” she said.
