Student loan borrowers in SAVE plan will start getting notices on Friday about moving to other repayment options, after a federal court struck down the plan earlier this month. The U.S. Department of Education said the mailings will begin for more than 7 million borrowers and will direct them to seek a new way to repay their federal student loans.
The Education Department said borrowers enrolled in the SAVE plan have been in forbearance since July 2024 while the legal fight over the plan played out in court. After the earlier-this-month ruling that struck down SAVE, the department said loan servicers will begin sending notices that give borrowers 90 days to select a new repayment plan.
The department said the notices begin going out with the start of loan-servicer processing on July 1, and that borrowers will be contacted in stages. Under the plan described by the department, each new group receiving notices will be scheduled every two weeks, with the longest-enrolled SAVE borrowers first.
The Education Department said the repayment plans available to borrowers would generally require higher monthly payments. For many borrowers, the change comes after a period in which they had not been required to make payments while the SAVE plan was tied up in litigation.
The impact is not limited to monthly payment calculations, according to the department’s description of how the litigation affected balances. The department said interest began accruing on loan balances after a court ruling last summer blocked implementation of the SAVE plan, meaning some borrowers would see increases in what they owe.
For borrowers who already were weighing affordability, the transition is likely to force new tradeoffs. Alexis Arredondo, who graduated from the University of California, Los Angeles in 2024 and said he took on about $40,000 in student debt, said he enrolled in the SAVE plan after graduation and now must choose between paying more per month or extending repayment and increasing the interest cost.
Nicholas Kent, an under secretary of education, said in a statement to The Associated Press that the Trump administration’s perspective is that borrowers are responsible for repaying loans. Kent said, “Let me be clear, the Trump administration’s perspective is that when a student takes out a loan, they are responsible for repaying it,” and also described SAVE-era forgiveness as unlawful in remarks he made that “The days of unlawful loan forgiveness are behind us.”
SAVE was one of several repayment initiatives launched during the Biden administration to reduce Americans’ student debt burden. The department said the plan offered more lenient terms than other options, including reducing monthly payments to as little as 5% of a borrower’s discretionary income and offering forgiveness for borrowers who made payments for at least 10 years and originally borrowed $12,000 or less.
While SAVE’s more generous terms were blocked amid court challenges, borrowers experienced what advocates described as uncertainty and repeated shifts. Mike Pierce, executive director of the Student Borrower Protection Center, said, “Over and over again, education officials of both parties made promises about fixing the broken student loan system and called student debt a crisis. And yet today, these same borrowers are being told it’s time to pay and you have no good options.”
Borrower advocates also pointed to changes taking effect in coming years. Alexander Lundrigan, policy and advocacy manager at Young Invincibles, said, “You’re talking about a pressing current affordability crisis, and you took away the most affordable plan option.”
The Education Department said it will instruct borrowers enrolled in SAVE to enroll in a new repayment plan and resume making payments as soon as this summer, beginning with a Friday notice rollout. It said the borrowers’ first notices will go out beginning Friday, and that subsequent batches will follow every two weeks as servicers contact more groups.