Millions of student loan borrowers remaining in the Saving on a Valuable Education (SAVE) plan have received notices urging them to select a different repayment option. The Education Department began sending these notifications in July to approximately 6.5 million borrowers still enrolled in the defunct plan. However, many recipients have found the communicated deadlines—typically 90 or 30 days—confusing and have either missed them without consequences or chosen to ignore the notices entirely.
Abby Shafroth, director of the National Consumer Law Center’s student loan assistance division, describes the communications as “frustratingly confusing and inconsistent.” Borrowers who fail to voluntarily switch plans will be transitioned automatically to the standard repayment plan, which could result in higher monthly payments.
The SAVE plan, an income-driven repayment initiative, was created during the Biden administration but later dismantled amid legal challenges. Many borrowers have enjoyed an extended forbearance period, with some not making payments for as long as six years due to overlapping pandemic protections. Scott Buchanan, executive director of the Student Loan Servicing Alliance, noted that no borrowers have yet been manually shifted out of SAVE.
Despite these developments, some borrowers are hesitant to transition, citing dissatisfaction with past changes in student loan policies. Social media discussions reflect a sentiment of skepticism regarding the Education Department’s intentions. Critics argue that waiting to be moved off the SAVE plan may lead to unforeseen challenges, including escalating interest rates and loss of eligibility for forgiveness programs.
Experts recommend borrowers take initiative and explore their repayment options to avoid being caught off guard by potentially higher payments under the standard plan, stressing the importance of understanding the full range of available choices.
Why this story matters
Key takeaway
Opposing viewpoint
