Millions of student-loan borrowers have yet to leave a key repayment plan — and the first deadline is approaching.
A Department of Education spokesperson confirmed that 1.5 million of the 7.5 million borrowers on the SAVE plan had selected a new repayment plan as of Monday morning, “allowing them to make progress toward paying down their balances and access loan discharge benefits that current SAVE borrowers are missing out on.”
SAVE was a Biden-era repayment plan that offered borrowers lower monthly payments and a shorter timeline for debt relief. The Trump administration eliminated the plan this spring. Beginning July 1, servicers started notifying enrolled borrowers of their 90-day timeframe to either switch to a new plan or be placed in a standard plan with the highest payments.
The 90-day deadline for the first batch of borrowers is approaching on September 29. Servicers said they expect to send notices to all SAVE borrowers by the end of 2026.
What’s next for SAVE borrowers
About 80% of SAVE borrowers still haven’t left the plan. Some borrowers have said they’re waiting for their 90-day notices.
Other borrowers said they switched off of SAVE before receiving their notice in order to begin earning credit toward forgiveness, either through an income-driven repayment plan or Public Service Loan Forgiveness, which forgives student debt for government and nonprofit workers.
The Education Department did not comment on how quickly borrowers who do not select a new plan within their timeframe will be moved to a standard plan, or how they will be notified of the transition.
Still, borrowers who have selected new plans have reported a range of glitches and errors. Some have received incorrect billing amounts when their actual payment was higher, and a separate group received notices that their accounts were delinquent and approaching default, when that wasn’t the case.
The department said it was aware of the errors and resolved them; however, they have left some borrowers confused about what they owe, making it difficult to budget for their proper payments.
An ongoing lawsuit is also seeking to stop the forced transfer of SAVE borrowers to a new plan. The law firm Public Goods Practice filed a motion in June to block the transfer, and the judge has yet to make a ruling. The department has disputed the claims within the lawsuit and recommended that borrowers select a “lawful” repayment option as soon as possible.
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