Consequences of the End of the SAVE Student Loan Program

The Saving on a Valuable Education (SAVE) plan, a federal student loan repayment initiative introduced during the Biden administration, has been officially terminated following a federal appeals court ruling. This decision has left millions of borrowers in a precarious situation, as they remain enrolled in a forbearance that began in July 2024. While this forbearance allowed borrowers to pause payments, it also meant that any payments made during this period would not contribute toward loan forgiveness.

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As of December 2025, approximately 7.2 million borrowers were still enrolled in the SAVE forbearance, a slight decrease from 7.9 million the previous year. The U.S. Department of Education's backlog of pending applications for new repayment plans has contributed to this stagnation. Many borrowers are either unsure about their options or believe they cannot afford payments under alternative plans. Scott Buchanan, executive director of the Student Loan Servicing Alliance, emphasized the risks of remaining in SAVE, noting that while borrowers may not need to make payments now, their debt continues to grow without progress toward forgiveness.

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Experts warn that borrowers who stay in the SAVE plan will face significant financial repercussions. Mark Kantrowitz, a higher education expert, highlighted that the typical SAVE enrollee carries a loan balance of about $57,000 with a 6.7% interest rate. Since interest resumed accruing in August 2025, borrowers could see their debt increase by over $2,500. Furthermore, remaining in SAVE means borrowers are not advancing toward debt forgiveness under either their repayment plan or the Public Service Loan Forgiveness program.

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Transitioning to alternative repayment plans, such as the Income-Based Repayment (IBR) plan, poses additional challenges. While IBR is considered a viable option, it calculates payments based on 10% of discretionary income, compared to the 5% used by SAVE. This shift could result in borrowers experiencing a doubling of their monthly payments. Kantrowitz noted that with a high volume of borrowers seeking income-driven repayment plans, the U.S. Department of Education may struggle to process applications promptly, further complicating the situation for those who delay switching plans.

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Critics of the SAVE program's termination express concern over the lack of clarity and support for borrowers navigating their repayment options. Many feel overwhelmed by the complexities of transitioning to new plans and fear the financial burden of increased payments. The uncertainty surrounding the processing of applications for new repayment plans adds to the anxiety faced by borrowers.

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As the effects of the SAVE program's end continue to unfold, borrowers are encouraged to explore their options and consider applying for alternative repayment plans as soon as possible. The urgency to act is underscored by the potential for increased debt and the challenges associated with transitioning to new repayment structures.

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• “They may not need to make a payment today, but their loan debt is quietly growing, and they are not making progress towards any loan forgiveness provided under the law,” — Scott Buchanan, Executive Director, Student Loan Servicing Alliance

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• “With 7.2 million borrowers filing an income-driven repayment plan request, the U.S. Department of Education is unlikely to be able to process those forms in a timely manner,” — Mark Kantrowitz, Higher Education Expert

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