Student Loan Borrowers Face New Realities As SAVE Repayment Plans End

Reports suggest that over seven million borrowers will be impacted by the phaseout of the income-driven repayment option.

Millions of federal student loan borrowers in the Saving on a Valuable Education (SAVE) repayment program could soon experience significant changes as the Biden-era plan nears termination due to legal challenges and shifts in federal policy, The Hill reports. The outlet suggests that over seven million borrowers will be impacted by the phaseout of the income-driven repayment option.

The SAVE plan, launched by former President Joe Biden’s administration in 2023, aimed to reduce monthly payments and speed up debt forgiveness for eligible borrowers. However, several Republican-led states filed lawsuits against the program, leading federal courts to block its implementation. Since then, the Department of Education has started transitioning borrowers into other repayment programs.

Borrowers currently enrolled in SAVE have mostly stayed in administrative forbearance since 2024. Interest on those loans resumed accumulating in August 2025. Officials have urged participants to choose alternative repayment plans while the legal issues are still ongoing.

In announcing a proposed settlement in the lawsuit, the U.S. Department of Education stated it would move all SAVE borrowers into legal repayment plans, stop accepting new enrollments in SAVE, and deny pending applications if the court approves the agreement.

This transition comes as federal policymakers prepare to introduce new student loan repayment options, including the Repayment Assistance Plan (RAP), which is expected to be available starting July 1, 2026. Under RAP, borrowers must make payments for 30 years before relief is allowed. The new framework aims to replace several current income-driven repayment programs and change how borrowers handle federal student debt.

Advocates have warned that ending SAVE could lead to higher monthly payments for many borrowers and create uncertainty for those seeking loan forgiveness programs. Meanwhile, federal officials advise borrowers to review available repayment options and get ready for further guidance as the transition progresses.