Student loan borrowers enrolled in the federal Saving on a Valuable Education (SAVE) plan will need to find a recent repayment plan or will be automatically enrolled in one. (Getty Images)
WASHINGTON — A federal court order last month to effectively eliminate a Biden-era student loan repayment plan ended years of chaos for more than 7 million student loan borrowers who participated in the program.
The Saving on a Valuable Education (SAVE) plan was a cornerstone of the Joe Biden administration’s loan forgiveness efforts, but it ran into legal challenges from several Republican-led states.
Starting July 1, federal loan servicers will begin sending notices to borrowers instructing them to complete a statutory repayment plan within 90 days, the department said. Borrowers who do not switch within the 90-day window set by their servicer will automatically be placed on a recent plan.
The agency Guidelines issued to borrowers in behind schedule March, informing them of the timeline and encouraging people to switch to a recent plan.
Here’s what borrowers need to know as they navigate the next steps:
How did we get here?
The program, introduced in 2023, aimed to reduce monthly loan payments for borrowers and forgive remaining debts after a certain period of time.
But millions of borrowers faced chaos and confusion as they were forced to deal with elaborate court rulings, the accrual of interest on their debts and ongoing uncertainty over the fate of the plan.
Borrowers were placed in one interest-free forbearance in 2024 amid legal limbo, and the department was reinstated charge interest on the debts of program participants in August 2025.
President Donald Trump’s administration in December announced a proposed agreement to finish the plan.
The agreement arose from a legal challenge to the plan by Missouri, Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma in 2024.
A federal judge dismissed this lawsuit In behind schedule February, he slammed government efforts to scrap the plan.
But a federal appeals court overturned the lower court’s decision in March, effectively ending the SAVE plan.
Was the SAVE plan already slated for abolition?
Congressional Republicans’ mega tax and spending cut bill was signed into law by Trump in July 2025 includes a comprehensive overhaul of the federal student loan system.
Part of the Republicans’ “big, beautiful” bill called for the SAVE plan to expire by July 2028.
I’m in SAVES. What are my recent repayment options?
Borrowers have several recent repayment options and can switch to a recent plan before receiving incoming notice from their federal loan servicer.
One option includes the income-based repayment (IBR) plan, which ties the borrower’s loan payment to their income.
Borrowers also have the option to participate in two repayment plans resulting from the Republicans’ “big, beautiful” law – the Repaid Assistance Plan (RAP) and the Tiered Standard plan – both of 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 deal for borrowers depends on the borrower’s particular situation.
“I would recommend that the repayment assistance plan is the best choice if you are a little earlier on the path to repayment and have a lot more interest because your balance is higher,” Cooper said.
“If you’re at a later stage in your repayment journey and closer to the 20- or 25-year mark for forgiveness, income-based repayment is probably a better choice,” he added.
Borrowers could also opt for a handful of other repayment options, such as Pay as You Earn and Income Contingent Repayment plans.
However, both of those plans will be phased out by July 2028 under the Republicans’ “big, beautiful” bill, meaning borrowers would have to switch plans again in two years.
What further 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 you have access to your account from the ground up, know all the basics of your situation, and then do some comparisons about the plan options available to you,” said Zampini, whose organization aims to promote affordability, accountability and equity in higher education.
Zampini also pointed this out Federal Student Aid Loan Simulator as a good resource for borrowers to get specific numbers to compare different plans.
“If there is a plan you want to move to that is already open and available, and if it is one of the older plans, start moving now if you can afford it,” she said. “And then if you want to wait for the new plan to open … know what the payment estimate is going to be, and then for July, remember to check back after the plan opens and look at the enrollment process.”
Amid the “total dissonance and chaos” 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 impact it’s going to have on their payments and the nature of their budget and what they need to do and when they need to do it.”
What about the plan to disband the department?
Persis Yu, deputy executive director and managing counsel at advocacy group Protect Borrowers, told States Newsroom she is “incredibly concerned that borrowers don’t know what to do, miss the deadline, get locked into a plan they can’t afford, and then default, which of course has incredibly stressful consequences.”
The end of SAVE also comes as the Trump administration continues its efforts to dismantle the Education Department, including through a series of interagency agreements that transfer several of its responsibilities to other departments.
According to the recent agreement, the Ministry of Finance will assume Education’s responsibility for collecting defaulted federal student loan debt – the first step in a multi-step process to take over Education’s entire federal student loan portfolio of approximately $1.7 trillion from the Treasury Department.
“The details of the plan with the Treasury Department currently involve debt collection, but the overarching task of dismantling the Ministry of Education currently means that there are not the people to oversee the debt servicers,” Yu said.
The government’s efforts to abolish the agency included: Reduction of force initiated in March 2025, which affected gigantic parts of the department, including Federal Student Aidor FSA.
Yu also highlighted a March bipartisan report Office of Government Accountabilitywhich found that FSA staff cuts affected the government’s ability to determine how well student loan servicers are doing their jobs.
