SAVE Student Loan Borrowers Must Choose a New Repayment Plan Soon

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More than 7 million borrowers in the federal SAVE (Saving on a Valuable Education) student loan repayment program must choose a different plan or face being automatically moved to a standard fixed repayment option — which typically means dramatically higher monthly payments. The SAVE program formally ended March 10 after litigation was settled, and the federal government began sending 90-day notices in July; the earliest borrowers will be moved out of SAVE on September 29. This matters for readers 50 and older who may be carrying federal student loans themselves, or who have adult children or grandchildren navigating this transition.

Borrowers who want to stay on an income-driven plan can choose the new Repayment Assistance Program (RAP), which sets payments at 1%–10% of adjusted gross income, waives unpaid interest when payments are made in full and on time, and forgives remaining debt after 30 years. The longer-standing Income-Based Repayment (IBR) plan is also still available and protected by federal statute, making it unlikely to be eliminated the way SAVE was. Two older income-driven options — Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) — are being phased out and will close permanently on July 1, 2028. The Federal Student Aid Repayment Calculator can help compare options using tax filing status, adjusted gross income, family size, and loan details.