Save Plan Ends, Prompting Borrowers to Select New Repayment Options
More than 7 million Americans will be required to change their student loan repayment plans starting Wednesday, as the Save plan officially concludes. This termination of the Biden-era initiative, launched in 2023, coincides with a broader overhaul of the US student loan repayment system.
The significant changes to the student debt landscape stem from legislation passed during the Trump administration in 2025 and a court ruling that declared the Save plan—an income-driven repayment program designed to reduce undergraduate loans by half—unconstitutional.
Borrowers Must Act Within 90 Days
Borrowers enrolled in the Save plan now have 90 days to select an alternative repayment plan. Those with loans issued before July 1, 2026, who do not intend to take out additional loans, will continue to have access to several existing income-driven and fixed-payment plans. These include the income-based repayment (IBR), pay as you earn (Paye), and income contingent repayment (ICR) plans, which provide loan forgiveness after 20 to 25 years of payments. However, the Paye and ICR plans are also scheduled to be phased out by summer 2028.
The US Department of Education has stated that the upcoming overhaul aims to simplify the student debt system. In a statement earlier this year, Nicholas Kent, the under-secretary of education, said:
“For years, borrowers have been caught in a confusing cycle of uncertainty, but the Trump administration’s policy is simple: if you take out a loan, you must pay it back.”
Concerns Raised by Experts and Advocates
Financial experts and student borrower advocates have expressed significant concerns regarding these changes.
“People are not feeling good,” Michele Zampini, associate vice-president of federal policy and advocacy at the Institute for College Access & Success (Ticas), said. “The two things that are top of mind are payment affordability, of course, and the ability to actually enroll and make payments without being embedded in servicing errors.”
Given the administrative uncertainty over the past year, Zampini does not expect a smooth transition. A September 2025 report from Ticas and Data for Progress found that nearly half (48%) of borrowers experienced long wait times to speak with or receive responses from loan servicers when seeking assistance.
“Even people who have been actively trying to move out of Save [before July 1] have been hitting a lot of roadblocks,” she said. “So now we’re going to see at some point people are going to start getting these 90 day notices, but we don’t know how well prepared the department or the servicers are to implement those.”
New Borrowers Face Different Repayment Options
New borrowers taking out loans on or after July 1, 2026, will have access only to the new repayment assistance plan (RAP) or the new tiered standard plan. Under RAP, monthly payments are calculated based on a borrower’s adjusted gross income (AGI) rather than discretionary income. For borrowers with an AGI above $10,000, monthly payments range from 1% to 10% of that amount. For those below this threshold, the monthly payment is set at $10. Loans are forgiven after 30 years.
The tiered standard plan is a fixed-payment plan with payments lasting between 10 and 25 years depending on the initial loan balance, with a minimum payment of $50 per month. Some borrowers may be automatically enrolled in this plan if they enter repayment without selecting another eligible option.
“A lot of people made enrollment and borrowing decisions based on one repayment system, and are going to leave school into a less generous, more expensive repayment system,” said Zampini.
Students Adjusting to New Realities
Students are already preparing for the impact of increased debt, with some reconsidering their future plans. Ryan Coryea, a 21-year-old senior at the University of California, San Diego, shared that she plans to move back home to Texas after graduation because she cannot manage student debt payments alongside rising housing and food costs. Although she is considering pursuing a law degree or a master’s in public policy, the new repayment plans may make this unfeasible.
“For me as well as for a lot of my friends, it’s really making us reconsider how we’re going to pay for grad school, and also if we’re going to go at all,” she said.
