WASHINGTON — Millions of U.S. federal student loan borrowers enrolled in the discontinued Saving on a Valuable Education (SAVE) repayment plan are beginning to receive notices requiring them to move to a new repayment option within 90 days, marking the start of a broad transition following the program's termination.
The U.S. Department of Education said loan servicers began issuing notifications on July 1 as part of a phased process affecting roughly 7.5 million borrowers who had enrolled in the Biden administration's income-driven repayment program before it was struck down through litigation and a subsequent legal settlement. Borrowers who fail to select a new repayment plan by the deadline provided by their loan servicer will be automatically placed into either the Standard Repayment Plan or the new Tiered Standard Plan.
The department said the notices will be sent in waves, with up to about 250,000 borrowers contacted each week. While the first group will have 90 days to choose a replacement plan, many borrowers will receive notices later in the rollout and therefore have additional time before any transition deadline applies. During the interim, affected borrowers remain in administrative forbearance, with interest continuing to accrue on their balances.
The SAVE plan, introduced during former President Joe Biden's administration, offered reduced monthly payments tied to borrowers' income and expanded loan forgiveness provisions. The program was challenged in court by several Republican-led states and ultimately ended after court action and a settlement approved earlier this year.
The repayment overhaul coincides with broader federal student loan changes that took effect July 1 under legislation enacted during President Donald Trump's administration. The law establishes a new Repayment Assistance Plan (RAP), which the Education Department says will be available to former SAVE participants, alongside revised standard repayment options. Existing borrowers may also remain eligible for certain legacy income-driven repayment plans depending on when their loans were issued and whether they take out new federal loans.
The Education Department has encouraged borrowers to review available repayment options before their individual deadlines. According to the department, borrowers who choose a qualifying plan before automatic reassignment can avoid being placed into a standard repayment schedule that may carry higher monthly payments.
The transition is expected to continue over the coming months as additional groups of borrowers receive notices from their loan servicers and select replacement repayment plans.
