SAVE student loan plan ending: What borrowers need to know
Court settlement agreement will move borrowers to standard repayment plan if they don’t select new option by October
(InvestigateTV) — Starting July 1, the 7.5 million people enrolled in the SAVE student loan repayment plan will have 90 days to pick a new plan.
Robert Farrington, the founder of The College Investor, said this is part of a court settlement agreement, and emails will be sent out on July 1 to everyone who is currently on the SAVE plan.
“Borrowers that don’t pick a new repayment plan will be moved to the standard repayment plan. So, payments will be due one way or another in October or so of 2026. Of course, if borrowers don’t start making payments when they default into the standard plan, they move down the path of delinquency and default,” Farrington said.
Check loan servicer for updates
Farrington said StudentAid.gov has put a banner at the top of the website warning about the change. The loan servicers all have notices when you log in. So, borrowers need to log in and check with their loan servicer and make sure their contact information is updated.
“But it’s also the time to run the numbers. You need to know what your payment will be under these repayment plans. You really have just a couple of options. The options are the standard repayment plan, which of course pays off your student loans. You have the IBR, income-based repayment plan, which will set your monthly payment between 10 to 15% of your discretionary income," Farrington said.
And if you do wait until July, the new Repayment Assistance Plan (RAP) launches, which will base your payment from $10 a month up to 10% of your adjusted gross income for earners that have more than $100,000 dollars in adjusted gross income.
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