The U.S. Department of Education ended the SAVE income-driven repayment plan on Wednesday, with loan servicers set to begin sending staggered 90-day notices to more than 7 million borrowers instructing them to select a new repayment plan. The termination of the Biden-era program follows a March 2026 federal court ruling that the plan was unconstitutional and coincides with broader changes to the federal student loan system enacted under the Trump administration’s One Big Beautiful Bill Act.
Nicholas Kent, the under-secretary of education, said in a statement earlier this year that the overhaul will simplify the system. “For years, borrowers have been caught in a confusing cycle of uncertainty, but the Trump administration’s policy is simple: if you take out a loan, you must pay it back,” Kent said.
Borrowers with loans issued before July 1 who do not plan to take out new loans retain access to the existing income-based repayment (IBR), Pay As You Earn (PAYE), and income-contingent repayment (ICR) plans. Those plans offer loan forgiveness after 20 to 25 years of payments. The Education Department said that ICR and PAYE will also be dismantled by summer 2028.
New borrowers taking out loans on or after July 1 have only two options: the Repayment Assistance Plan (RAP) or the tiered standard repayment plan. Under RAP, monthly payments are calculated based on a borrower’s adjusted gross income rather than discretionary income. Borrowers with an AGI above $10,000 pay between 1% and 10% of that amount monthly; those below the threshold pay $10 a month. Loans under RAP are forgiven after 30 years. The tiered standard plan is a fixed-payment plan with terms of 10 to 25 years depending on the initial balance and a minimum monthly payment of $50. Some borrowers entering repayment who have not selected a plan may be automatically enrolled in the tiered standard plan.
Michele Zampini, associate vice-president of federal policy and advocacy at the Institute for College Access & Success (Ticas), said borrowers are anxious about the transition. “People are not feeling good,” Zampini said. “The two things that are top of mind are payment affordability, of course, and the ability to actually enroll and make payments without being embedded in servicing errors.”
Zampini pointed to a September 2025 survey by Ticas and Data for Progress that found 48% of borrowers reported long wait times to get a response from a loan servicer. She said borrowers who had been trying to leave the SAVE plan before the deadline had already encountered obstacles. “Even people who have been actively trying to move out of Save [before July 1] have been hitting a lot of roadblocks,” Zampini said. “So now we’re going to see at some point people are going to start getting these 90 day notices, but we don’t know how well prepared the department or the servicers are to implement those.”
Zampini added that the change will disproportionately affect students who enrolled under one system and will graduate into a different one. “A lot of people made enrollment and borrowing decisions based on one repayment system, and are going to leave school into a less generous, more expensive repayment system,” she said.
Ryan Coryea, a 21-year-old senior at the University of California, San Diego, previously told the Guardian she was planning to move back to Texas after graduation because she could not afford student debt payments along with rising housing and food costs. She said the new repayment plans may make graduate school unaffordable. “For me as well as for a lot of my friends, it’s really making us reconsider how we’re going to pay for grad school, and also if we’re going to go at all,” Coryea said.