Student borrowers enrolled in the federal Savings for Valuable Education (SAVE) plan must find a novel repayment plan or automatically enroll in one. (Getty Images)
WASHINGTON — A federal court order last month effectively repealing the Biden-era student loan repayment plan ended years of chaos for more than 7 million student borrowers enrolled in the program.
The Savings for Valuable Education Plan, or SAVE, was a cornerstone of the Joe Biden administration’s loan forgiveness efforts but has been embroiled in legal challenges from several GOP-led states.
The department said that on July 1, federal loan servicers will begin sending notices to borrowers advising them to enter into a legal repayment plan within 90 days. Borrowers who do not change their plan within 90 days specified by the servicer will automatically be placed on the novel plan.
Agency issued guidelines to borrowers at the end of March, informing them of the schedule and encouraging them to switch to the novel plan.
Here’s what borrowers should know as they take next steps:
How did we get here?
The program, introduced in 2023, was intended to reduce monthly loan installments for borrowers and write off the remaining debt after a specified period of time.
However, millions of borrowers experienced chaos and confusion as they were forced to deal with intricate court rulings, interest accruing on their debt, and constant uncertainty about the fate of the plan.
Borrowers were placed in interest-free forbearance in 2024 faced legal suspension and the faculty was reopened charging interest regarding the debt of program participants in August 2025.
President Donald Trump’s administration in December announced a proposed agreement to complete the plan.
The agreement follows a legal challenge to the plan filed in 2024 by Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma.
Federal judge dismissed this lawsuit in behind schedule February, thwarting the administration’s efforts to thwart the plan.
But a federal appeals court overturned the decision of the lower court in March, effectively ending the SAVE plan.
Was the SAVE plan about to be eliminated?
Republican Congressional Mega Tax and Spending Cuts Act signed into law by Trump in July 2025 includes a sweeping overhaul of the federal student loan system.
Part of the GOP’s “big, beautiful” bill phased out the SAVE plan by July 2028.
I’m in SAVED. What are my novel repayment options?
Borrowers have several novel repayment options and can switch to a novel plan before receiving notification from a federal loan servicer.
One option involves an income-based repayment (IBR) plan, which ties borrowers’ loan repayments to their earnings.
Borrowers also have the option to enter into two repayment plans under the “big, beautiful” GOP law – the Repayment Assistance Plan (RAP) and the Tiered Standard Plan – which go into effect on July 1.
Preston Cooper, senior fellow for higher education policy at the American Enterprise Institute, a right-leaning think tank, noted that whether IBR or RAP is a better option for borrowers depends on their specific situation.
“I recommend that if you are earlier in your repayment and have a much higher interest due to a higher balance, the Repayment Assistance Plan is your best choice,” Cooper said.
“If you are in the later stages of repayment and are closer to the 20 or 25 years in which you can qualify for forgiveness, income-driven repayment is probably a better choice,” he added.
Borrowers can also opt for several other repayment options, such as income-driven repayment plans and pay-as-you-earn.
However, these two plans will be eliminated by July 2028 under the Republicans’ “big, beautiful” law, meaning borrowers will have to change their plans again in two years.
What other steps can I take in the meantime?
Michele Zampini, associate vice president for federal policy and advocacy at the Institute for College Access & Success, said the best thing a borrower can do is “just be proactive.”
“Make sure at a very basic level you have access to your account, you know all the basics of your situation, and then compare the plan options you will have,” said Zampini, whose organization aims to advance affordability, accountability and equity in higher education.
Zampini also noticed this Federal Student Aid Loan Simulator as a good source of information for borrowers to get concrete numbers to compare across different plans.
“If there is a plan you want to transfer to that is already open and available, if it is one of the older plans, get started now if you can afford it,” she said. “And then if you want to wait for the new plan to open…find out what your estimated payment will look like and then set yourself a reminder for July to check back and look at the enrollment process once the plan opens.”
In the face of the “complete dissonance and chaos” that borrowers have experienced at SAVE, Zampini said the department has “really shirked its responsibility to at least keep borrowers informed and give them clear information about what’s happening, when it’s happening, and what the implications are going to be on their payments and the nature of their budgets and what they need to do and when.”
What about the plan to eliminate the department?
Persis Yu, deputy executive director and general counsel at the advocacy group Protect Borrowers, told States Newsroom she is “extremely concerned that borrowers will not be able to figure out what to do, will miss the deadline, will be placed on a plan they can’t afford, and then fall into default, which of course has extremely burdensome consequences.”
The end of SAVE also comes as the Trump administration continues its efforts to disband the Department of Education, including through a series of interagency agreements that shift some of its responsibilities to other departments.
According to the latest agreement, Treasury Department will assume Education’s responsibility for collecting defaulted federal student loans – the first step in a multi-phase process for the Treasury Department to assume the entire approximately $1.7 trillion federal student loan portfolio.
“The specifics of the plan with Treasury are currently about debt collection, but the overarching mission to disband the Department of Education right now means there are no people to supervise service staff,” Yu said.
Part of the administration’s efforts to dismantle the agency included reduction in strength launched in March 2025, which covered wide areas of the department including Federal student aidor FSA.
Yu also highlighted the nonpartisan report in March Government Accountability Officewhich concluded that staff reductions at the FSA have impacted the government’s ability to determine how well student loan servicers are doing their jobs.
