What will happen to people on the SAVE student loan plan after it ends July 1?
In a matter of weeks, student loans will look different for some borrowers as the Saving on a Valuable Education, or SAVE, plan officially ends on July 1 after years of legal challenges.
That means many will have to act quickly to take advantage of other options.
What was the SAVE plan?
The SAVE plan was a Biden-era program where borrowers’ monthly payments were calculated based on their income and family size. In some cases, these monthly payments were as low as $0.
Those enrolled in the SAVE plan didn’t see their balance grow if they kept up with required payments, and could see their balance forgiven in as few as 10 years of payments.
Missouri’s Attorney General at the time, Andrew Bailey, filed a lawsuit with other attorneys general from Arkansas, Florida, Georgia, North Dakota, Ohio and Oklahoma challenging the SAVE plan. Because of these legal challenges, many borrowers using the SAVE plan were put in forbearance, meaning payments were paused. These loans still accrued interest, though.
The U.S. Department of Education, in December 2025, announced a joint settlement agreement with Missouri that ended the SAVE plan. The terms of the settlement included that the Education Department would not allow any new borrowers in the SAVE plan, deny pending applications, and move people in the SAVE plan into new repayment plans.
What happens now?
People who don’t re-enroll into a different loan repayment plan by October will be automatically put into a different plan.
These are the Standard Repayment Plan and the Repayment Assistance Plan.
Standard Repayment Plan: This is described by the Department of Education as the “basic repayment plan” for the William D. Ford Federal Direct Loan and Federal Family Education Loan (FFEL) Program. With the Standard Plan, payments are fixed and made for up to 10 years, or between 10 and 30 years for consolidation loans.
“The exact payment amount is calculated so that you pay off the entire loan amount (including the interest that accrues) before the end of your repayment period,” the Education Department said.
If you make up to $24,999 annually, you can expect a 10-year repayment plan. Those making $25,000-$49,999 will see 15-year plans; 20-year plans will be for those earning $50,000-$99,999; and people with a $100,000 income or more will get a 25-year plan.
“The standard repayment plan is best for borrowers who want to pay off their loans quickly and minimize interest costs,” Nerdwallet said. “Borrowers who can best manage standard plan payments typically have debt equal to or less than their income, but it’s possible some borrowers on this plan may have a high debt to low income ratio.”
Repayment Assistance Plan: The Repayment Assistance Plan has people pay a percentage of their adjusted gross income, from one to 10%, with $50 per dependent deducted from the monthly payment. Minimum monthly payments under RAP are $10.
A Loan Simulator on the Education Department’s website can help estimate what the monthly loan payments will be, although the agency notes that it can’t predict future payments with 100% accuracy.
“In order to make these predictions, Loan Simulator makes several assumptions as it calculates monthly repayment amounts,” the Education Department said.
For those whose income is lower and debt is higher, “you should prefer RAP,” higher education expert Mark Kantrowitz told CNBC.
Borrowers who already have student loans and don’t plan on taking out any more could still access some other income-driven repayment plans, including the Income-Based Repayment, Income-Contingent Repayment, or ICR, and Pay As You Earn plans.
The ICR and PAYE plans end on July 1, 2028. According to CNBC, after that date, those in those plans who switch into IBR or RAP can get credit toward forgiveness for previous payments.
People can apply for income-driven repayment plans by contacting their student loan servicer, or going to studentaid.gov/IDR.
What other changes to student loans can be expected?
Because of changes in the “One Big Beautiful Bill Act,” passed in July 2025, there are now limits to the Parent PLUS program. Starting July 1, parents taking out their first PLUS loan for their child can borrow up to $20,000 a year per student, and up to $65,000 total.
According to Kiplinger’s, if a parent wants to borrow for the same child, they can share the single $20,000 a year because the cap follows the student, not the parent.
For Plus loans given before July 1, the old rules still apply, but only for three years or until the student finishes their schooling.
“A parent already borrowing for a current student is in a completely different spot from one whose first PLUS loan lands for a freshman in fall 2026,” Kiplinger’s wrote. “Same school, same major, very different ceiling, all because of timing.”
GRAD PLUS loans are also getting capped, to $20,500 a year and $100,000 total. Students in law, medicine and dentistry will be limited to $50,000 a year, and $200,000 in total. This is under a federal lifetime cap of $257,500, according to Kiplinger’s.
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Ella Rae Greene, Editor In Chief
