Overview
- Starting July 1 the Department of Education will begin sending individualized notices that give SAVE enrollees about 90 days to choose a new repayment option or be automatically moved into the Standard Repayment Plan or the new Tiered Standard Plan.
- Officials warn that automatic placement will most likely raise monthly payments because both standard options set fixed, generally higher bills compared with the former SAVE income-driven terms.
- A backlog of more than 530,000 pending repayment-plan requests and staggered servicer notice dates could delay processing when millions seek plan changes, creating a queue that may slow borrowers’ switches.
- Interest resumed while borrowers were in SAVE forbearance has already increased balances for many borrowers and experts say staying in the defunct plan or shifting to standard schedules will halt progress toward forgiveness and raise default risk.
- The transition follows the One Big Beautiful Bill Act’s replacement of most income-driven plans with the Repayment Assistance Plan and has drawn calls from over 60 Democratic lawmakers for the department to auto-enroll borrowers into the lowest-cost option if they fail to act.