Dec. 16, 2025 — Millions of Americans enrolled in the Biden-era Saving on a Valuable Education (SAVE) student loan repayment plan are facing a major—and fast-moving—shift that could end a long stretch of ultra-low or even $0 monthly bills.
The U.S. Department of Education says it has reached a proposed settlement with Missouri that would end the SAVE plan, halt new enrollments, deny pending applications, and move current SAVE borrowers into other repayment options—pending court approval. [1]
For borrowers, the immediate reality is a mix of urgency and uncertainty: the department says SAVE enrollees will have a “limited time” to pick a new plan, but it has not provided a concrete timeline for when the transition and billing will begin. [2]
What’s happening to the SAVE plan—and why it matters now
The SAVE plan, launched in 2023, was designed to make student loan repayment more affordable by tying payments to income and family size, lowering bills for many borrowers—sometimes to $0—and accelerating forgiveness for some with low original balances. [3]
But the program has been locked in legal conflict for months. According to the Department of Education, court actions in 2024 and 2025 blocked implementation of SAVE, eventually leading to an agreement that would effectively terminate the plan and unwind enrollment. [4]
The department’s press release frames the settlement as a cleanup of what it calls an unlawful program, arguing it would have cost taxpayers more than $342 billion over 10 years (citing the Congressional Budget Office). [5]
Borrower advocates strongly disagree, warning that ending SAVE removes what they view as the most affordable repayment pathway and could push financially stretched households closer to delinquency and default—especially as other costs rise. [6]
Why some SAVE borrowers haven’t had to pay in years
A key reason this story is so disruptive: many SAVE borrowers have effectively lived through multiple back-to-back “pauses”—not just the pandemic.
Here’s the sequence many borrowers experienced:
- March 2020: Federal student loan payments paused during COVID-19. [7]
- October 2023: Repayment restarted, but the SAVE plan had already drawn major interest from borrowers seeking lower payments. [8]
- Through Sept. 30, 2024: A Biden-era “on-ramp” (described as a grace period) meant missed payments didn’t immediately trigger severe consequences like credit damage or default. [9]
- Mid-2024 onward: Court battles pushed SAVE borrowers into administrative forbearance, meaning payments were not due. [10]
As a result, Investopedia reports that for some borrowers, the next required payment could be their first in nearly six years, even though repayment technically resumed for the broader system in 2023. [11]
The biggest catch: interest has already restarted for SAVE borrowers
Even while payments have been paused for SAVE enrollees, interest is no longer on hold.
The Department of Education says that after court rulings, it informed more than 7.6 million borrowers that loans in SAVE forbearance would begin accruing interest on Aug. 1, 2025. [12]
CBS News similarly notes that SAVE borrowers were placed in forbearance in 2024, with interest later restarting in 2025—meaning balances can grow while borrowers wait for the transition rules to settle. [13]
How many borrowers are affected?
Different sources cite slightly different counts, depending on timing and definitions (currently enrolled vs. total who have enrolled).
- The Department of Education says more than 7 million borrowers are enrolled in SAVE, plus 450,000 borrowers who expressed interest in enrolling and would be affected. [14]
- Investopedia puts the number at about 7.7 million borrowers who will need to find a new plan. [15]
- Protect Borrowers and TIME describe SAVE as having served more than 8 million Americans, with roughly 7 million currently enrolled. [16]
Regardless of the exact count, the scale is enormous—and the operational lift (switching borrowers, recalculating bills, processing applications) is a major concern across the student loan ecosystem. [17]
When will SAVE borrowers have to resume payments?
This is the question borrowers want answered—and right now, the most honest answer is: it’s still unclear.
- The settlement requires court approval, and the Education Department has not published a hard deadline for when borrowers must exit SAVE. [18]
- The department says borrowers will have a “limited time” to select a new plan and begin repayment if the settlement is approved, and it plans direct outreach “in the coming weeks.” [19]
- Investopedia reports the department has not provided a date for when borrowers will need to leave SAVE, but is urging borrowers to review repayment options now. [20]
If you’re enrolled in SAVE, the practical takeaway is that the billing restart could come quickly once timelines are finalized, and many borrowers may see higher monthly payments than they budgeted for.
How much could monthly payments rise?
Moving off SAVE could mean a meaningful jump in monthly bills.
Investopedia reports that under some alternative income-driven repayment (IDR) plans, payments can run $100 to $500 more per month than what borrowers would have paid under SAVE. [21]
And reporting from The American Prospect captures borrower fears that payments could “double” in some cases, forcing changes like taking on side gigs, cutting retirement contributions, or delaying financial milestones. [22]
Actual payment changes will depend on income, family size, loan type, and the plan a borrower moves to—but the direction of travel for many households is clear: upward.
What repayment plans can borrowers switch to?
Sources agree on the big picture: borrowers will be moved out of SAVE and must choose another repayment structure, typically falling into one of two buckets:
- Fixed payment plans (like the standard plan)
- Income-based plans (other IDR options, where available)
NPR member station KCUR reports borrowers will have to choose between fixed plans and income-based options, even as the overall IDR landscape is changing under new law. [23]
TIME points to Income-Based Repayment (IBR) as one potential destination plan and also notes the Standard Repayment Plan as a default option if borrowers don’t select something else. [24]
The Department of Education is urging borrowers to use the Federal Student Aid Loan Simulator to compare options and estimate payments. [25]
The next big shift: new repayment rules in 2026
The SAVE shutdown is colliding with a broader rewrite of repayment options under the One Big Beautiful Bill Act (OBBBA).
NerdWallet reports that beginning July 1, 2026, new borrowers will effectively face two core repayment pathways:
- A standard fixed-payment plan
- The new Repayment Assistance Plan (RAP), which NerdWallet describes as the primary income-driven option for new loans, with payments set at 1% to 10% of adjusted gross income (depending on earnings), and forgiveness after 30 years. [26]
KCUR (summarizing NPR reporting) also notes two new plans rolling out in 2026, including RAP, while warning that SAVE borrowers may be expected to change plans before then. [27]
A growing concern for 2026: the “tax bomb” debate returns
One less-discussed but potentially high-stakes angle is taxes on forgiven student loan balances.
A Protect Borrowers memo argues that while OBBBA permanently extended tax treatment for certain discharges (like death or disability), it did not extend the broader tax exemption for cancelled federal student debt through income-driven repayment beyond the current window—warning that borrowers who receive IDR cancellation after Jan. 1, 2026 could face “thousands of dollars” in additional federal income tax liability. [28]
This issue won’t hit every borrower—but for people counting on long-term IDR forgiveness, it’s becoming part of the financial planning conversation again. [29]
What SAVE borrowers should do now: a practical checklist
Even without a confirmed billing restart date, there are steps borrowers can take immediately to reduce surprises:
1) Confirm your current status
- Log into your Federal Student Aid account and your loan servicer portal.
- Verify you’re listed as being on SAVE and see whether your loans show forbearance and whether interest is accruing.
2) Update your contact information
- The Education Department says it will conduct direct outreach in the coming weeks. Make sure emails, mailing address, and phone number are correct. [30]
3) Use the Loan Simulator
- The department specifically recommends using the Loan Simulator to estimate payments and compare eligibility across plans. [31]
4) Prepare income documentation and consent
- The Education Department says IDR applications can process faster when borrowers consent to sharing federal tax information (and that annual recertification can be automated). [32]
5) Budget for a higher bill than you had on SAVE
- With reports of possible $100–$500 monthly increases for some borrowers, build a “high payment” scenario into your budget now. [33]
6) Watch out for scams
- Whenever student loan rules change, scam activity tends to spike. Use official channels (StudentAid.gov and your servicer) for plan switching, and be wary of anyone charging fees for actions you can do for free.
The bottom line on Dec. 16: SAVE is ending, but the clock is still being set
As of today, the most important points for borrowers are straightforward—even if the details are still evolving:
- The Education Department has announced a settlement that would end the SAVE plan, pending court approval. [34]
- New enrollments would stop, pending applications would be denied, and current enrollees would be moved to other repayment plans. [35]
- Payments for SAVE borrowers have been paused under forbearance, but interest has been accruing again since Aug. 1, 2025, increasing balances for some borrowers. [36]
- No official “first payment due” date has been provided yet—but borrowers are being told to act quickly once the transition window opens. [37]
If you’re in SAVE, the best strategy right now is to treat this as a near-term budgeting and paperwork event—not a distant policy fight—and to be ready to choose a new plan as soon as federal guidance and servicer notices land. [38]
References
1. www.ed.gov, 2. www.ed.gov, 3. time.com, 4. www.ed.gov, 5. www.ed.gov, 6. protectborrowers.org, 7. www.investopedia.com, 8. www.investopedia.com, 9. www.investopedia.com, 10. www.investopedia.com, 11. www.investopedia.com, 12. www.ed.gov, 13. www.cbsnews.com, 14. www.ed.gov, 15. www.investopedia.com, 16. protectborrowers.org, 17. www.ctpublic.org, 18. www.ed.gov, 19. www.ed.gov, 20. www.investopedia.com, 21. www.investopedia.com, 22. prospect.org, 23. www.kcur.org, 24. time.com, 25. www.ed.gov, 26. www.nerdwallet.com, 27. www.kcur.org, 28. protectborrowers.org, 29. prospect.org, 30. www.ed.gov, 31. www.ed.gov, 32. www.ed.gov, 33. www.investopedia.com, 34. www.ed.gov, 35. www.ed.gov, 36. www.ed.gov, 37. www.investopedia.com, 38. www.ed.gov
