The U.S. Department of Education has directed the 7.5 million borrowers enrolled in the SAVE repayment plan to switch to a legal alternative by September 29, 2026, at the earliest, following a federal court’s decision to end the plan in March 2026.
Starting July 1, 2026, federal loan servicers began issuing notices to affected borrowers, giving each borrower 90 days from their individual notice date to select a new repayment plan. The earliest group’s deadline falls on September 29, though most borrowers will have until later in the fall or winter to make their selection, according to the Department of Education.
The SAVE plan—Saving on a Valuable Education—was blocked by a federal appeals court on March 10, 2026, after the Eighth Circuit Court reversed an earlier dismissal and directed the District Court to find the plan unlawful. In response, the Department of Education announced a settlement with Missouri and other states that challenged the plan, ending all new enrollments and requiring existing borrowers to transition to compliant repayment options.
Under Secretary of Education Nicholas Kent stated in the Department’s March 27 guidance that “borrowers currently enrolled in the illegal SAVE Plan will be given at least 90 days to enter a legal repayment plan of their choice.” Borrowers who do not select a new plan within their 90-day window will be automatically enrolled in either the Standard Repayment Plan or the new Tiered Standard Plan, both available as of July 1, 2026.
The SAVE plan had promised borrowers artificially low monthly payments and was the Biden Administration’s third major attempt at mass student loan forgiveness. Estimates suggested the plan would have cost taxpayers more than $342 billion over ten years, according to the Congressional Budget Office figures cited in the Department’s guidance.
Borrowers have several options for their new repayment plan. The Repayment Assistance Plan (RAP), which launched July 1, 2026, sets monthly payments at 1 to 10 percent of adjusted gross income, with a minimum payment of $10 per month. The Standard Repayment Plan offers fixed 10-year terms, while the new Tiered Standard Plan provides fixed terms of 10, 15, 20, or 25 years based on total loan balance. Existing income-driven repayment plans—such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR)—remain available to current borrowers, though some borrowers face restrictions on plan access after July 1.
The Department emphasized that borrowers should act proactively rather than wait for automatic placement. Borrowers who provide consent for the Department to obtain their federal tax information directly from the IRS can have their income-driven repayment application processed faster, eliminating the need to manually upload income documentation.
Servicers will notify each borrower of their specific 90-day deadline. Borrowers can contact their servicer at any time to switch to a new plan before receiving formal notice, though servicers began distributing notices in July 2026 with deadlines staggered through March 2027.
Sources
- U.S. Department of Education — March 27, 2026 press release announcing the SAVE plan’s end, 7.5 million borrowers affected, 90-day transition period, and details on new repayment plans including RAP
- CNBC — July 6, 2026 reporting on loan servicers beginning SAVE plan exit notices and September 29 earliest deadline from Department’s June 25 court filing
- Yahoo Finance — June 30, 2026 reporting on the 90-day deadline and September 29 date for first batch of borrowers
- The Institute for College Access & Success (TICAS) — July 7, 2026 coverage of the March 10, 2026 federal court ruling ending SAVE and borrower notification timeline through March 2027
- Federal Student Aid (Nelnet) — FAQ confirming September 30, 2026 enrollment deadline and automatic plan placement after 90 days
- Fidelity — Details on RAP availability starting July 1, 2026 for Direct Student Loan borrowers
- U.S. Department of Education Fact Sheet — July 1, 2026 details on RAP monthly payment structure (1–10 percent of income, minimum $10)
