The Trump administration is telling SAVE borrowers it’s time to switch plans and start paying their student loans again.
After two years of confusion surrounding the Biden-era student loan repayment plan, the Department of Education on Friday began sending notices to the 7.5 million borrowers in the plan with instructions on what steps they must now take.
The guidance brings some clarity for borrowers. But for many, it also means higher monthly payments and a longer path to loan forgiveness.
The elimination of the SAVE plan is one of several steps by the Trump administration aimed at reducing the $1.7 trillion of federal student loan debt and requiring borrowers to repay more of their loans. An extensive overhaul of the federal student loan program also introduces new borrowing caps and repayment plans while phasing out other plans.
“For years, borrowers have been caught in a confusing cycle of uncertainty,” Undersecretary of Education Nicholas Kent said in a news release. “But the Trump administration’s policy is simple: If you take out a loan, you must pay it back.”
Introduced in 2023, SAVE offered the most generous terms of any federal student loan repayment plan. But Republican-led states challenged the plan in court, and borrowers haven’t been required to make any payments for more than a year and a half as the lawsuits played out. The SAVE plan officially ended when a court approved a settlement agreement in March.
Since then, borrowers have been waiting for the Department of Education to provide guidance for what comes next. They began receiving that Friday.
If you’re a borrower on the SAVE plan, here’s what you should know.
[Read: Best Private Student Loans.]
Here’s What Happens Next
If you’re enrolled in the SAVE plan, you’ll need to switch to a new plan by the end of September.
In the meantime, you should keep an eye out for a pair of notices in the coming months. Within the next week, you’ll get a Department of Education notice informing you that you’ll need to exit your current plan. The guidance will also explain how to enroll in a new plan and preview the changes coming to repayment plans.
Loan servicers will then start sending notifications on July 1 informing you that you have 90 days to enroll in a new plan and providing instructions for how to do so. Borrowers who don’t select a new repayment plan within 90 days will automatically be transitioned to the 10-year standard plan, which would result in considerably higher payments in many cases. (You can still switch plans after the deadline, but you’d likely have to make at least one standard plan payment.)
If you haven’t made any payments during the SAVE forbearance, you may want to log into your account on the studentaid.gov website to confirm which servicer is handling your loan so you won’t miss the notification.
You’ll have multiple repayment options to select, including the new Repayment Assistance Plan, or RAP, that goes into effect on July 1.
Borrowers don’t have to wait until July 1 to switch plans, and some may benefit from transitioning to a new plan earlier. For example, those eager to restart their progress toward forgiveness can do so by shifting to a new income-driven repayment plan and making payments. Plus, although SAVE borrowers haven’t been required to make payments, interest has been accruing on their loans since August 2025, which could provide incentive for some to move to another plan before the deadline.
[Read: Best Parent Student Loans: Parent PLUS and Private.]
Student loan experts and advocacy groups say the Trump administration’s strategy for shifting borrowers to new plans has its pros and cons. The release of guidance came within weeks of the court ruling that ended the SAVE plan, sparing borrowers from another prolonged period of uncertainty. The department also chose to wait until July 1 to start the 90-day timeline, giving people the option of moving into the new RAP plan.
“We appreciate that ED at least plans to wait to transition borrowers until after new repayment plans are up and running this summer but remain concerned that they are not prepared to smoothly manage such a major transition,” says Michele Zampini, associate vice president of federal policy and advocacy at The Institute for College Access & Success.
But the Department of Education could have chosen a more borrower-friendly approach to the transition, says Abby Shafroth, managing director of advocacy at the National Consumer Law Center. She says that would have involved the department automatically moving people to the most affordable alternative plan rather than sticking them in the pricier standard plan if they miss the 90-day window to pick their own option.
“Instead, it’s leaving people to fend for themselves in the midst of a deepening affordability crisis,” says Shafroth.
[Read: Best Student Loan Refinance Lenders.]
Which Plan Should You Choose?
The best replacement option for you will depend on your financial situation and goals. It’s likely that any new plan will mean higher payments.
The SAVE plan was the most affordable option for most people, with payments as low as 5% of a person’s discretionary income. Borrowers at the lowest income levels qualified for $0 monthly payments. Those who took out $12,000 or less in loans could have the debt canceled after 10 years of payments, a much shorter timeline than the 20 or 25 years required by other plans. (The new RAP plan doesn’t cancel loans until the 30-year mark.)
Most borrowers will have four income-driven repayment plans to choose from. Two of those plans, the PAYE and Income-Contingent Repayment plans, are being phased out by 2028, so you may want to avoid those if you don’t want to switch plans again in two years. The Income-Based Repayment plan will remain, although new borrowers won’t have access to it starting on July 1. Here’s a look at the three existing plans.
| Percent of Discretionary Income | Years | Phasing Out? | |
| IBR (if borrowed after July 1, 2014) | 10% | 20 | Remains in effect |
| IBR (if borrowed before July 1, 2014) | 15% | 25 | Remains in effect |
| Income-Contingent Repayment | 20% | 25 | Ends July 1, 2028 |
| Pay As You Earn | 10% | 20 | Ends July 1, 2028 |
SAVE borrowers can also enroll in the RAP plan that launches on July 1.
The RAP determines monthly payments based on your income, with a minimum required payment of $10. While the debt forgiveness period is 30 years, which is longer than previous plans, RAP offers several new benefits.
For each dependent you claim, your required payment is reduced by $50. Any unpaid interest left over after a monthly payment is waived to prevent your debt from growing. Furthermore, if your payment doesn’t reduce the loan principal by at least $50, the government will contribute a matching amount to help accelerate principal reduction.
Here’s a look at how existing plans compare with the new RAP plan. Payments would be higher for most people on the RAP plan. Here’s a look at what you’d pay monthly on RAP on a $100,000 loan based on your income, assuming you have no dependents. Now is a good time to research the potential costs and benefits of your plan options.
“The best thing borrowers can do is stay informed and be proactive,” says Zampini. “Make sure you have access to your loan account, know which plan you’re in, what you owe and who your servicer is, and use resources such as ED’s repayment calculator to compare your plan options.”
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The Clock Is Ticking: Here’s What SAVE Borrowers Must Do Now originally appeared on usnews.com
