Nearly 7 million federal student loan borrowers remain enrolled in the defunct Saving on a Valuable Education (SAVE) plan, a Biden administration-era repayment program that was designed to cut monthly bills but has since been blocked by a federal appeals court. This means these borrowers are not making progress toward student loan forgiveness, and their debt continues to grow due to accruing interest. For example, a typical SAVE enrollee with a loan balance of around $57,000 and a 6.7% interest rate could see their debt increase by over $2,500 since interest accrual resumed in August.
Borrowers in the SAVE plan have been in administrative forbearance, meaning no payments were due while legal challenges played out. However, the Trump administration announced that SAVE enrollees would have approximately 90 days from July 1, 2026, to exit and select a new repayment option. The first batch of notices informing borrowers of this 90-day window went out on July 1, 2026, though some servicers, like Nelnet, expect to notify borrowers in waves stretching until March 2027, potentially giving some until May 2027 to switch plans.
The Education Department has stated that if borrowers fail to switch plans by their deadline, they will be automatically moved to either the Standard Repayment Plan or the Tiered Standard Repayment Plan. These plans often lead to fixed payments that are considerably higher than those offered under SAVE, making them potentially unaffordable for many borrowers. Failure to make these payments could lead to loan delinquency and, eventually, default. As of late April, over 530,000 federal student loan borrowers were in a backlog waiting for their applications for new repayment plans to be processed.
