The U.S. Department of Education has announced a proposed settlement that will terminate the Saving on a Valuable Education (SAVE) repayment plan, an income-driven repayment (IDR) program introduced in 2023 under the Biden administration.
Under this proposal:
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No new borrowers will be enrolled in SAVE.
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Pending applications will be denied.
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Current participants will be transitioned into other repayment options.
This change impacts millions of borrowers who relied on SAVE for affordable repayment. With the program ending, borrowers should prepare for recertification and new repayment structures.
Timeline
While the court decision is pending and no official timeline has been finalized, the SAVE program is expected to end between December 2025 and early 2026.
What This Means
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No new enrollment in SAVE.
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Pending applications denied.
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Current SAVE borrowers placed in temporary forbearance while transition instructions are finalized.
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Early 2026: Borrowers must exit SAVE forbearance and enroll in a new repayment plan.
Impact on Borrowers
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Borrowers seeking income-based repayment should move to an available IDR plan to maintain certainty and avoid future program cancellations.
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IBR (Income-Based Repayment) will remain available for existing borrowers.
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The new RAP income-driven plan is expected to begin accepting applications earlier in 2026 than initially anticipated.
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ICR (Income-Contingent Repayment) and PAYE (Pay As You Earn) remain options for eligible borrowers but will be phased out by July 1, 2028.
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Other plans based on fixed repayment amounts (not income) include:
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Standard Repayment
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Graduated Repayment
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Extended Repayment
Important Note:
Borrowers with new federal loan disbursements after July 1, 2026 will not have access to Graduated or Extended plans. The Standard term will range from 10–25 years, depending on loan balance. RAP will be the only IDR plan available.
What Should SAVE Borrowers Do Now?
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Prepare to re-enter repayment as SAVE forbearance ends.
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Review all communications from Federal Student Aid and loan servicers.
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Evaluate future repayment plan options. Borrowers can review and calculate their options on the Federal Student Aid Loan Simulator
Other Tips
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If you want to remain on an income-driven plan, strategize around income reporting and tax filing:
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If your 2025 income is lower than 2024, file taxes early so servicers use the lower income for recertification—resulting in lower payments.
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If your income increased in 2025, consider filing taxes after recertification to keep payments lower.
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Borrowers nearing the 20–25-year forgiveness threshold should select a plan that keeps them on track. Note: Switching to RAP will extend the maximum repayment term to 30 years.
Bottom Line
The end of SAVE is not unexpected, but borrowers can minimize the impact by:
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Timing tax filings strategically.
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Understanding new IDR and fixed repayment options.
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Planning ahead for manageable payments.
Final rules for the SAVE phaseout are still being defined. Stay tuned to EdAssist for updates as they become available.
