Millions of federal student loan borrowers on the Saving on a Valuable Education (SAVE) repayment plan may soon see a significant increase in their monthly payments.
The Trump administration announced the termination of the SAVE Program, a policy created under the Biden administration to lower monthly payments based on affordability and expand access to loan forgiveness. This week, a federal appeals court revived a Republican‑led lawsuit challenging the SAVE repayment plan, overturning a lower court’s dismissal.
Borrowers enrolled in SAVE must switch to a new repayment plan within 90 days. If they do not select a plan, they may be automatically placed on a standard 10-year repayment plan, which generally has significantly higher monthly payments.
According to the U.S. Department of Education, as of March 2026, over 7.5 million borrowers are currently enrolled in the Saving on a Valuable Education. The end of the SAVE repayment plan marks a major shift in how they will manage their debt.
“For a lot of people abruptly needing to accommodate potentially a three- or four-figure monthly bill, that can force a massive lifestyle change,” said Kate Wood, lending expert at NerdWallet, told PBS News.
Falling behind on student loans can negatively impact one’s credit score, making it more difficult to secure mortgages and other lines of credit. Experts say that as millions of people are forced to adjust already tight budgets, it could create a ripple effect on the economy.
If you’re enrolled in the SAVE plan, you’ll need to switch to a new plan by the end of September. You should soon receive a notice from the Department of Education informing
you that you’ll need to change your plan, along with instructions on how to enroll in a new one. Loan servicers will then start sending you notifications beginning July 1 to inform borrowers that they have 90 days to enroll in a new plan.Although the SAVE plan has been eliminated, borrowers can apply for other income-based programs, such as Pay As You Earn (PAYE) and the new Repayment Assistance Program (RAP). Launching in July 2026, the RAP will set monthly payments at one to 10% of adjusted Gross
Income (AGI) with a $10 minimum, a 30-year term, and a $50 monthly discount per dependent. If you haven’t made any payments during the SAVE forbearance period, officials advise borrowers to log in to their account on the studentaid.gov website to confirm which servicer is handling their loan.RELATED CONTENT: Trump Administration To Begin Wage Garnishment On Defaulted Student Loan Borrowers In January