Millions of federal student loan borrowers are facing an important deadline this month as the Trump administration continues winding down the Biden-era SAVE repayment plan. According to the Department of Education, roughly 1.5 million of the 7.5 million borrowers previously enrolled in the Saving on a Valuable Education (SAVE) plan have already selected a new repayment option as of this week. That leaves about 6 million borrowers who have yet to make a switch, but the first major deadline is arriving on September 29.
"The biggest alteration is not simply the end of one repayment plan, but the return of actual monthly payments under a new system that can look very different from what they were paying before," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. The deadline affects millions of Americans carrying federal student loan debt. SAVE was the centerpiece of the Biden administration's efforts to make student loan payments more affordable.
The plan lowered monthly payments for many borrowers through easier pathways to forgiveness and also prevented some unpaid interest from accumulating. However, the Trump administration eliminated the program earlier this year after a lengthy legal battle. Borrowers who do not act could ultimately find themselves enrolled in repayment plans with significantly higher monthly costs than they were paying under SAVE.
Servicers began notifying SAVE borrowers on July 1 that they would have 90 days to select a new repayment plan, and the first group of borrowers will reach that deadline on September 29. A spokesperson for the Department of Education told Yahoo Finance that 1.5 million borrowers had already transitioned to new repayment plans as of Monday morning. Newsweek reached out to the Department of Education for comment via email.
The department previously said approximately 80 percent of SAVE borrowers have not yet left the program. Some borrowers are likely waiting until they receive official notices from their loan servicers before taking action, while others have proactively switched plans so they can still earn credit toward federal forgiveness programs like income-driven repayment forgiveness and Public Service Loan Forgiveness (PSLF). Borrowers who fail to select a new repayment option by their deadline could be placed into a standard repayment plan that carries the highest monthly payments.
However, the program became the subject of legal challenges brought by Republican-led states, which argued the administration lacked authority to implement key parts of the plan. Courts ultimately blocked major portions of SAVE, and the Trump administration moved to end the program altogether. At its peak, roughly 7.5 million to 7.7 million borrowers were enrolled in the plan.
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