6.5 Million Student Loan Borrowers Face Deadline To Leave SAVE Plan

About 6.5 million federal student loan borrowers are still enrolled in the defunct SAVE repayment plan, down from a peak of roughly 8 million, and the first wave of borrowers who received 90-day switch notices from the Education Department in July hit their deadline this week, according to Money.com. SAVE, an income-driven repayment plan launched under the Biden administration, was challenged in court as executive overreach, and enrollees were placed in forbearance while the lawsuits played out, meaning some borrowers haven't made a payment in more than six years.

Borrowers who ignore the deadline will automatically be moved to the standard repayment plan, which sets a fixed payment based on the amount borrowed rather than income. "Based on the Department of Ed's guidance, if you ignore it, they're going to put you on the standard plan," said Betsy Mayotte, president of The Institute of Student Loan Advisors. "And that will be — for many people — very expensive." Four income-driven repayment plans remain available as alternatives, though all are expected to cost more per month than SAVE did before forbearance began.

More than 9.3 million federal borrowers are already in default, a number likely to grow as SAVE enrollees lose forbearance protection. The Education Department has also extended its deadline for enrolling in autopay to qualify for a temporary 1% interest rate discount, now available to anyone who signs up by the end of 2026 through June 2028.