Story perspectives

Education Dept Sets 90-Day SAVE Plan Deadline, Caps, Lawsuit

7/16/2026

Summary

Education Dept Sets Deadline

The U.S. Department of Education began moving SAVE-plan borrowers to options on July 1, 2026, with a 90-day deadline to choose a plan by September 29, 2026, or be placed in the Standard or Tiered Standard plan.
Caps limit undergraduate loans to $20,500 per year ($100,000 lifetime) and professional loans to $50,000 per year ($200,000 lifetime).
Public Goods Practice filed a motion on June 23 to halt plan changes while SAVE litigation proceeds.

Summary

Kent Promotes RAP

Under Secretary Nicholas Kent promoted the Repayment Assistance Plan (RAP) as a congressional alternative to SAVE.
Economist Constantine Yannelis found borrowers expecting 2022 forgiveness were more likely delinquent after the program was blocked.
Betsy Mayotte of the Institute of Student Loan Advisors warned Congress is phasing out several payment plans, eroding borrower confidence.
Melissa Dezendorf, a New Mexico veterinarian with $208,000 debt, stopped payments after SAVE entered legal limbo.

Summary

RAP Enables PSLF

Tiered Standard Plan, effective July 1, 2026, does not count toward the 120 Public Service Loan Forgiveness (PSLF) payments.
RAP, an income-driven plan with 1%-10% earnings payments, qualifies for PSLF.
Scott Buchanan of the Student Loan Servicing Alliance warns automatic Tiered Standard enrollment yields zero PSLF credit.
Nancy Nierman of the Education Debt Consumer Assistance Program says borrowers can pick IBR or other income-driven plans to keep PSLF eligibility.

History

Historical Context

The 2007 College Cost Reduction and Access Act, signed by President George W. Bush, created income-driven repayment and the Public Service Loan Forgiveness (PSLF) program, which forgives balances after 120 qualifying payments. On July 1 2026 the Department of Education launched the SAVE plan, moving borrowers like Melissa Dezendorf—who owes $208,000—into a Tiered Standard track that excludes PSLF credit, reviving the law’s original borrower-protection concerns.

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Education Dept Sets Deadline

The U.S. Department of Education began moving SAVE-plan borrowers to options on July 1, 2026, with a 90-day deadline to choose a plan by September 29, 2026, or be placed in the Standard or Tiered Standard plan.
Caps limit undergraduate loans to $20,500 per year ($100,000 lifetime) and professional loans to $50,000 per year ($200,000 lifetime).
Public Goods Practice filed a motion on June 23 to halt plan changes while SAVE litigation proceeds.

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