Biden’s SAVE plan for student loans is officially dead. Here’s what experts suggest now

After years in legal limbo, millions of federal student loan borrowers under the Savings for Valued Education (SAVE) repayment plan will finally be foreclosed, although this may not be the outcome they were hoping for.

On Tuesday, a district court judge formally struck down the rule behind SAVE, an income-driven repayment plan created under the Biden administration that was known for its generous terms and low monthly payments.

Republican prosecutors challenged the plan for the first time during former President Joe Biden’s term. When President Donald Trump took office, his administration stopped contesting the lawsuit and agreed to the settlement. The court initially dismissed the suit, saying there was no case if both parties agreed, but after an appeals court intervened, the judge eventually agreed to strike down the rule.

In other words, if you’re on a savings plan, you’ll soon have to select a new payment option or eventually make one for yourself.

During that period of legal uncertainty, loans under the SAVE scheme were deferred, meaning borrowers had no monthly payments, but began accruing interest since last August.

Experts say there are still many questions about what will happen next for borrowers enrolled in the SAVE program, including the timeline for any plan transitions.

“In the coming weeks, the department will issue clear guidance on next steps for borrowers enrolled in a non-statutory savings plan, including details regarding how borrowers can transition to a statutory repayment plan,” Education Undersecretary Nicholas Kent said in a statement.

Here’s what experts say borrowers who can afford to save should do now.

Dust off your account and update your contact information

Your first step should be to log in to Studentaid.gov and your loan servicer’s website, said Kate Wood, a lending expert at NerdWallet. Make sure you know the status of your loan and that all of your contact information is up to date.

“We don’t know how quickly this is going to move,” Wood said. “We don’t know exactly what borrowers will be instructed to do, but basically if the Department of Education or your servicer sends information to you, however they send it, they consider their job done.”

Read more: Big changes to student loan borrowing and repayment are coming. Here’s what you should know

If they send information to an email address you can no longer access or a physical address where you no longer live, “it doesn’t matter to them,” she added.

While on the government’s website, you can compare your other repayment options with their loan simulator.

Most borrowers can expect their payments to increase after the SAVE program ends, Wood said. This is partly because other income-based repayment plans use less generous formulas to calculate income.

Also, if borrowers are earning more now than when they enrolled years ago — even if their salaries increase just to keep up with inflation — their monthly payments will be higher.

Understand your options and deadlines

After receiving this notice from the Department of Education, borrowers will likely be given a period of time to change from one savings plan to another, said Betsy Mayotte, founder of the Institute of Student Loan Counselors.

“The big, outstanding question here is: If someone fails to change plans within their allotted time period, will they be placed in the next lower-income plan, or will they be placed in a standard payment plan?” Mayotte said.

To avoid this, it’s important to know what options are available to you, and be prepared to make a selection before you’re automatically turned off. In general, as long as you do not take out any other loans, you will have access to the following plans until July 2028:

• Standard payment plan
• Gradual payment plan
• Extended payment plan
• Income Conditional Repayment (ICR)
• Pay as you earn (PAYE)
• Income Based Repayment (IBR)

(If you need help navigating these options, we’ve prepared a guide to other upcoming changes for student loan borrowers.)

Starting July 2026, the new department offers Repayment Assistance Program (RAP)which will replace ICR and PAYE.

School teacher Kelly Elizabeth Belt fills out paperwork to pay off her student loan as she tries to navigate policies under the Trump administration, in Provo, Utah, May 30, 2025. Photo by Jim Urquhart/Reuters

If you’re seeking income-driven forgiveness, which depends on the plan but generally forgives your loan balance after 20 to 25 years of payments, “you should switch as quickly as possible because you’re just wasting time,” Mayotte said, adding that the months borrowers spent affording to save won’t count toward the forgiveness.

It counts toward the Public Service Loan Forgiveness (PSLF) program if you’re able to use the Department of Education’s buyback opportunity, which allows a borrower to pay a lump sum amount equal to what the Department estimates the person will pay during the “nonqualified deferral or forbearance” period if that amount is enough to complete the total number of qualifying payments.

Consider whether holding on to patience makes sense right now

There are reasons to remain patient and wait for the department to make the decision for you, such as using this payment relief to target higher-interest loans, if you have them, Mayotte said.

There’s also a small, but non-existent, chance that more lawsuits might aim to reinstate the Adjusted Payment by Earnings (REPAYE) plan, which SAVE replaced in October 2023, said Winston Berkman Breen, legal director at Protect Borrowers.

“There is a possibility of some additional strikes,” he said.

The potential for more confusion to come gives him pause to recommend across the board that people find a new payment plan.

“There is some precision about conservation, but that doesn’t necessarily mean there’s more clarity about how to move forward yet,” he said.

What if none of the options are affordable?

That confusion — and frustration — has led some borrowers to say they don’t intend to repay when the forbearance period expires, both Mayotte and Wood said.

After 90 days of nonpayment, the government considers borrowers delinquent, and after 270 days, they are in default. This can have serious consequences, largely on people’s credit scores. On average, people see a three-digit credit score drop from a delinquent student loan, Wood said.

Read more: Student loan borrowers will not have their wages garnished if they default, the Trump administration says in reversing policy

“Then if you’re looking to do something else that you might want to do, particularly buy a home, get a car loan, get a personal loan, suddenly you’re a much less attractive borrower for that lender than you were before,” she said.

More than 7 million borrowers were in savings tolerance as of the beginning of this year, and experts worry that shifting them to higher monthly payments will cause more people to fall into delinquency and default. The federal government has said it is not garnishing wages for defaulting borrowers at this time, but has not said whether it will resume.

According to government data, about 3.4 million Americans were more than 270 days late on loan repayments at the end of last year. In total, about 6.6 million borrowers owe about $170 billion in federal student loans. Experts told PBS News that SAVE’s termination could trigger a default crisis.

Wood added that if you look at all of your options and decide that none of them are practical, you may want to talk to your loan servicer about entering into forbearance or regular deferral.

“For many people who suddenly need to accommodate a potential three- or four-figure monthly bill, this can lead to a major lifestyle change,” she said.