The U.S. Department of Education is telling more than 7 million borrowers in the SAVE income-driven repayment plan that the long pause is almost over and it is time to get ready to pay again. Those borrowers have been in administrative forbearance since July 2024 while courts hashed out legal challenges to the program, but the department says loan servicers will start shifting accounts back into active repayment as soon as July. “The days of unlawful loan forgiveness are behind us,” Under Secretary of Education Nicholas Kent said.
What borrowers will receive
According to The Associated Press, borrowers enrolled in SAVE will begin getting direct notices starting Friday. Beginning July 1, loan servicers will send letters that give borrowers 90 days to pick a new repayment plan. The outreach will not hit everyone at once. Instead, notices will go out in stages, with a new group contacted roughly every two weeks.
The department says borrowers who have been in SAVE the longest will be contacted first. Officials also warn that if someone does not choose a plan within the 90 day window, servicers may move that borrower into a standard repayment plan by default.
Government settlement and guidance
In December the Education Department announced a proposed settlement with the State of Missouri that would end the SAVE plan entirely, halt new enrollments, deny pending applications, and shift current SAVE borrowers into other repayment plans that the department views as clearly legal, the U.S. Department of Education said in a press release.
Federal Student Aid plans to offer support and direct outreach to help borrowers choose a new plan, and the agency has said it will publish transition details for people affected by the settlement. Court approval is still required, and the department has laid out a staged timeline so that millions of accounts are not flipped at once with no warning.
Why payments could rise
SAVE cut some monthly payments to as little as 5% of discretionary income and, for some borrowers, offered faster forgiveness. Moving out of SAVE could therefore mean significantly higher bills, especially for borrowers who have been paying little or nothing each month.
The One Big Beautiful Bill framework and the department’s proposed rulemaking would replace prior income driven repayment options with a Repayment Assistance Plan and a Tiered Standard plan, a structure detailed in the Federal Register that generally directs more of a borrower’s income toward payments for new loans beginning on July 1, 2026.
Borrowers have already watched balances grow after courts blocked parts of SAVE and certain forbearances ended, a trend that reporters and officials have pointed to as part of the department’s rationale for this round of outreach.
How to prepare
Borrowers are being urged to log in to StudentAid.gov to confirm account details, save screenshots of balances and recertification dates, and run the Loan Simulator to compare what payments would look like under different plans.
If you want to enter an income driven plan quickly, the department suggests consenting to automatic tax data retrieval to speed up processing, and contacting your loan servicer with questions about deadlines and required documentation. Smaller moves now, such as updating tax filing status, checking whether you qualify for an auto debit interest discount, or consolidating eligible loans, can reduce the sting of a suddenly larger monthly bill.
Legal context
The shift away from SAVE follows a long legal battle led by Missouri and several other states. An appellate court opinion expanded an injunction against SAVE and instructed the lower court to enter a settlement, clearing the way for the department’s proposal to wind down the program.
The Eighth Circuit’s opinion questioned whether the Higher Education Act allowed the kind of rapid forgiveness that SAVE provided. That legal conclusion now shapes how the department is managing the transition for borrowers. Because the rollback is tied to court rulings and a negotiated settlement, officials have opted for staged notice campaigns rather than an overnight change to every account.
The department says it will publish more details and updates on its court actions page and urges borrowers to keep an eye on emails from their servicers and from StudentAid.gov. In the meantime, borrowers are encouraged to keep records of past payments, carefully check statements once notices arrive, and use the department’s online tools to estimate the costs of different plans and how accrued interest could affect their balances.
