ED Begins Campaign to Move Borrowers Enrolled in SAVE to Other Repayment Plans
By Maria Carrasco, NASFAA Staff Reporter
The Department of Education (ED) announced on Friday new guidance directing borrowers enrolled in the Saving on a Valuable Education (SAVE) plan to choose a new repayment plan; otherwise, in the coming months, they will be automatically enrolled in either the current standard plan or the new tiered standard plan.
All borrowers enrolled in SAVE will begin receiving guidance via email about this announcement over the week. Starting July 1, loan servicers will contact borrowers enrolled in SAVE, instructing them to apply for another repayment plan within 90 days or be automatically enrolled into a new plan. ED clarified that loan servicers will notify borrowers of the dates for their specific 90-day deadline.
ED believes the 90-day timeline, which would begin after the July email notification, is “ample time” for borrowers to explore repayment options.
If a borrower wants to exit the SAVE plan before July 1, they may contact their servicer at any time to enroll in another repayment plan, ED clarified.
Current SAVE borrowers will have several repayment plan options to choose from, depending on their loan type, including the new tiered standard plan, enacted by the One Big Beautiful Bill Act (OBBBA), which becomes effective on July 1. Under this plan, borrowers are required to make fixed monthly payments over 10 to 25 years, depending on their loan balance. Borrowers could see higher monthly payments on the tiered standard payment plan compared to other repayment plans – such as the new Repayment Assistance Plan (RAP), which will also become available on July 1, or the income-based repayment plan (IBR), income-contingent repayment plan (ICR), and the Pay As You Earn (PAYE) plan.
Under the OBBBA, ICR, PAYE, and SAVE will all sunset on July 1, 2028. A borrower currently enrolled in SAVE could choose to switch to ICR or PAYE now, but would need to switch to another repayment plan by July 1, 2028. In the press release, ED did not indicate that it will encourage borrowers to enroll in a specific plan.
Many questions remain about ED’s timeline for processing the repayment plan applications for the over 7.5 million borrowers enrolled in SAVE, given that ED already has a large backlog of pending income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) buyback applications. In a recent legal filing, ED confirmed in February that it has a backlog of 576,609 pending IDR applications and 88,170 PSLF Buyback applications.
“The Department says borrowers must ‘enroll’ in or ‘transition’ to a new repayment plan within 90 days, so it’s unclear if borrowers whose applications may be stuck in the processing backlog at their 90-day deadline will be held harmless or if they will be moved to a standard plan," said Megan Walter, NASFAA senior policy analyst. “Servicers are currently processing about 250,000 applications a month. At that pace, clearing an estimated 7.5 million additional applications could take more than two years. We urge the Department to allocate adequate resources to the backlog and the anticipated surge in applications.”
There are also questions about how ED’s new interagency agreement (IAA) with the Treasury Department could affect the department’s ability to move these borrowers into other repayment plans, particularly if the scope of that agreement expands beyond its current focus on defaulted loans.
For the past two years, the legality of the SAVE plan has been the subject of litigation – including the expedited path to loan forgiveness and $0 monthly payments for borrowers who qualify. Most recently, the Trump administration and the state of Missouri reached a settlement to end the SAVE plan, which a federal court finalized. ED has announced its plan to hold a negotiated rulemaking session to remove the SAVE plan from federal regulations, but has yet to release any details on when this would occur.
This is a developing story. Stay tuned to Today’s News for more updates on the SAVE plan.
Publication Date: 3/30/2026
Michelle B | 4/7/2026 1:45:34 PM
I guess I'm confused as to what these borrowers would do while their application is being processed (apparently for about two years). Do they make payments? If so, how do they know how much to pay or when?
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