Overview
- The department, in emails sent March 27, told more than 7 million people that the SAVE plan has ended and that they must choose a new student loan repayment plan before servicer deadlines begin July 1.
- Borrowers who do not pick a plan by their deadline will be moved into one automatically based on their situation, and officials urge switching early to avoid confusion and missed payments.
- Making a choice now can curb growing balances because interest on SAVE accounts restarted in August 2025, and resuming payments can restart progress toward programs like Public Service Loan Forgiveness.
- New options open July 1, including the Repayment Assistance Plan that bases payments on income and forgives remaining debt after 30 years, along with a Tiered Standard plan, while existing choices like Income-Based Repayment remain available.
- The shutdown follows GOP-led state lawsuits and a March appeals court action that vacated the rule, and it unfolds as the Trump administration shifts some collections to Treasury and trims Education Department staffing, raising oversight and borrower hardship concerns.