Starting July 1, the 7.5 million borrowers formerly enrolled in the SAVE repayment plan must take action to select a new income-driven or fixed repayment plan. Because of a court settlement ending the SAVE program, borrowers will automatically be placed into a much more expensive Standard Repayment Plan if they fail to pick a new option within 90 days.
Advocates are warning about widespread misinformation and processing glitches as millions scramble to contact their loan servicers. To avoid a massive jump in your monthly bills, you must navigate the system carefully.
The Facts You Need to Know.
- The Deadline: Loan servicers will begin issuing notices around July 1, starting a 90-day window to choose an alternate repayment plan.
- The Default Risk: If you do not actively pick a plan before your deadline, you will be automatically placed into the Standard Repayment Plan, which spreads your loan out over 120 equal, non-forgiveness-eligible payments. For many, this causes a payment spike of hundreds of dollars per month.
- Available Options: Borrowers with older loans can still apply for remaining Income-Driven Repayment (IDR) plans like Income-Based Repayment (IBR), though some plans (like PAYE and ICR) are slated to phase out by 2028.
Actionable Steps to Protect Yourself
- Verify Your Servicer: Scammers take advantage of major student loan overhauls. Make sure you only deal with your officially assigned servicer and review alerts on StudentAid.gov.
- Update Your Contact Info: Log into your official loan servicer’s portal and check that your current email, phone number, and physical address are up-to-date.
- Run the Numbers: Use the Loan Simulator on StudentAid.gov to preview exactly how much your monthly payment will be under different plans before making a final selection.
- Be Proactive: Do not wait for your servicer to reach out if you already know you need to change.
If you’d like to narrow down your options, tell me:
