Many Americans with federal student loans could see a sharp increase in their monthly bills in the coming weeks if they do not move out of the discontinued SAVE repayment plan in time. Consumer advocates say payments for some borrowers could double or even triple.
Earlier this year, the Donald Trump administration told borrowers they would have roughly 90 days to transition from the Saving on a Valuable Education, or SAVE, plan into another repayment option. For some borrowers, that clock started on July 1, putting their deadline on Sept. 29. Loan servicers, however, are sending notices in waves, which means many borrowers will have more time.
SAVE, an income-driven repayment plan launched during the Joe Biden administration, had offered very low monthly payments to many borrowers. It was later struck down through Republican-backed legal challenges and legislation. As those court fights played out, many enrollees went more than two years without making payments, while their balances continued to grow because of accruing interest.
According to higher education expert Mark Kantrowitz, more than 6.9 million borrowers were still enrolled in SAVE as of March, with average debt close to $55,000. That compares with around 7.7 million borrowers in July 2025. Kantrowitz said some borrowers may be taking an “ostrich approach,” hoping the issue disappears, while others are struggling to find the time and money to sort it out.
Exit timing is not the same for every borrower
Federal student loan servicers are staggering notices about the 90-day window to leave SAVE, so borrowers are being contacted on different schedules. That makes it important for borrowers to check their servicer accounts immediately and confirm their individual deadlines.
According to a U.S. Department of Education court filing, the earliest required exit date is Sept. 29. The department also said most borrowers will receive additional time. Nelnet said in an online FAQ that it will keep sending notifications through the end of the year, while the Missouri Higher Education Loan Authority (Mohela) said borrowers may continue receiving alerts into October.
Michele Zampini, associate vice president of federal policy and advocacy at The Institute for College Access & Success (TICAS), said most borrowers should receive notices by email, though some may get a letter by mail. To avoid missing that communication, borrowers should make sure their contact details are current both with their servicer and on their studentaid.gov account.
Borrowers can apply for a new income-driven repayment plan through studentaid.gov or their loan servicer’s website. They can also allow the department to obtain income information directly from the IRS, which may speed up application processing. Delays are still likely: the Education Department is working through a large backlog, and a May court filing said more than 530,000 income-driven repayment requests were pending at the end of April.
Doing nothing could lead to a much bigger bill
Borrowers who fail to choose another repayment plan within 90 days of being notified will be placed automatically into either the Standard Repayment Plan or the new Tiered Standard Plan, which took effect on July 1. Under SAVE, payments were based on 5% of a borrower’s discretionary income. Standard plans, by contrast, spread the debt into fixed monthly payments over a set period.
Kantrowitz told CNBC that payments for some borrowers could double or triple. He said the Education Department’s other income-driven plans can often keep monthly bills lower than the standard options.
One example is the Repayment Assistance Plan, or RAP, launched in July. It caps monthly payments at between 1% and 10% of earnings and offers loan forgiveness after 30 years. It also includes features not available in standard plans, such as a $50 monthly discount for each qualifying dependent.
Based on an analysis that student loan advisory platform Summer shared with CNBC, a two-person household earning just over $50,000, with $60,000 in student debt at a 6.8% interest rate, would owe $690 a month under the 10-year Standard Repayment Plan. Under RAP, that payment would fall to $158.
Rich Williams, chief customer officer at Summer, said borrowers should calculate what they would owe under the next-best income-driven plan now, even if they are not switching immediately, and begin budgeting for that amount. In his view, it is better to be financially prepared than to be caught off guard by a much higher payment.
