When Student Loan Borrowers Must Switch Out of the SAVE Plan

Millions of student loan borrowers will soon need to switch out of the SAVE plan.But the exact timing of that transition is murky, and will depend on a variety of factors.SAVE, a Biden-era income-driven repayment (IDR) plan that offered borrowers lower payments than any other IDR option as well as accelerated student loan forgiveness in some cases, is coming to an end.The program has been stuck in litigation for more than two years, and more than seven million borrowers have been caught in the middle, thrown into an involuntary forbearance they didn’t ask for.

While the forbearance paused monthly payments (and also suspended interest for a time), the period hasn’t been counting toward student loan forgiveness under IDR plans or Public Service Loan Forgiveness (PSLF), leaving many borrowers stuck.But the SAVE plan is now ending.Congress passed legislation last summer phasing out SAVE by July 2028.In practice, however, the plan will be gone much sooner than that after the Eighth Circuit Court of Appeals ordered a federal district court to effectuate a settlement agreement between the Education Department and a group of states that had originally challenged the program.

Under the terms of that court-ordered agreement, which was officially entered in March, the SAVE plan regulations have been vacated.Given these developments, the Education Department has now started transitioning borrowers out of the SAVE plan.But the exact process and timeframe for this transition has been the subject of some debate and uncertainty.Here’s where things stand.

Student Loan Borrowers Will Have 90 Days to Switch Repayment Plans After Receiving Notice The Education Department has said that borrowers will start receiving notices this month (in July) giving them 90 days to move their student loans to another income-driven repayment plan, such as IBR or PAYE.Payments under most other IDR plans will be more expensive than SAVE, which could result in payment shock for many borrowers.But those who don’t take steps to transition their student loans to other IDR plans will be automatically put into a Standard plan, says the department, which could be even more unaffordable and won’t count toward student loan forgiveness in most cases.“On March 10, 2026, a federal court issued an order preventing the U.S.

Department of Education (ED) from implementing the SAVE Plan and parts of other income-driven repayment (IDR) plans,” said the Education Department in online SAVE plan guidance updated last week.“The most recent court action invalidated most of the July 2023 rule” that authorized the SAVE plan.“Importantly, the most recent court action requires that borrowers who have loans in forbearance because they enrolled in or applied for the SAVE Plan must select a new repayment plan and begin repaying their loans,” continued the department.“If you’re a borrower who has loans in forbearance because you enrolled in or applied for the SAVE Plan, you are required to select a new repayment plan.

If you don’t select a new repayment plan, your loan servicer will move you to a different plan.” The department has separately indicated that borrowers would specifically be placed in a Standard plan if they don’t enroll in a different IDR option.The Education Department has sent a series of increasingly urgent emails to borrowers during the last several months, warning them that they need to change repayment plans.But the actual 90-day notices have only started going out in July.That means the soonest that anyone will be kicked off the SAVE plan would be in late September.

90-Day Notices to Student Loan Borrowers May be Staggered Over Months But not everyone who has student loans in the SAVE plan forbearance will receive their 90-day notices now, or even during July.The Education Department has since confirmed that the 90-day notices will be sent to borrowers in waves, potentially staggered over a lengthy period of weeks or even months.“No borrower will be required to move off the SAVE Plan until September 29, 2026 at the earliest,” said the Education Department in a court filing last month as it faces a legal challenge over its process for moving student loan borrowers out of the SAVE plan.“And since Defendants are transitioning borrowers in tranches, most borrowers (potentially including one or even all four Plaintiffs) will get even more time than that.” But how much more time? The department did not say in its court filing.

But new guidance released by one of the Education Department’s major student loan servicers suggests that at least some borrowers could get a lot more time, possibly up to a year, before they would need to change repayment plans.“Nelnet is reaching out to borrowers.Our notification informs you of the deadline to choose a new plan.Once you hear from us by email or mail (based on your communication preference), you must make a switch within 90 days,” said Nelnet in updated guidance on its website for Department of Education-serviced federal student loans.

“Nelnet is notifying nearly three million Nelnet borrowers, so we're reaching out in waves.You'll receive your notice between July 2026 and March 2027.” Borrowers who don’t get their 90-day notice until March 2027 could have until July 2027 to pick a different repayment plan – far longer than the Education Department has been suggesting in urgent emails during the last several weeks telling people that they must take action immediately.Timing For Switching Student Loans Out of SAVE Depends on Several Factors Ultimately, when borrowers can (or should) apply to move their student loans out of SAVE and into other repayment plans will depend on a number of factors including: When the borrower receives the 90-day notice telling them they need to change repayment plans; The borrower’s ability to afford what likely will be higher monthly payments under other IDR plans; The borrower’s goals and priorities (i.e., postponing payments for as long as possible, or getting back on track for student loan forgiveness, particularly PSLF, as soon as possible).“It might make sense to switch plans now if you are able to afford payments in another plan, and you want to begin making progress toward paying off your loan or toward loan forgiveness through Public Service Loan Forgiveness (PSLF) or Income-Driven Repayment,” explained the National Consumer Law Center in an article posted in April.

“On the other hand, it might make sense to wait… to switch plans if you want to enroll in RAP, which won’t be available until July 1, or you do not qualify for a $0 payment in another plan and cannot afford the payments you would owe in other plans.” There is no one-size-fits-all path here, and student loan borrowers will have to weigh these considerations and make the decision that best aligns with their situation.For some borrowers who receive the 90-day notices quickly, they may not have much of a choice.But other borrowers could potentially have a lot more time to consider their options.But ultimately, based on the current landscape, everyone with student loans in the SAVE plan will need to change to a different repayment plan; the only question is when.