U.S. student-loan servicers begin moving SAVE borrowers to new repayment plans

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Student-loan SAVE repayment change

Highlights

U.S. student-loan servicers are notifying SAVE borrowers they must select a new repayment plan within 90 days following a court-settlement directive.
Nelnet is sending transition notices to 3 million borrowers, with notifications staggered between July 2026 and March 2027, allowing some until May 2027 to leave SAVE.
Nearly 46,000 borrowers have already applied for the new Repayment Assistance Plan, but those not choosing a lower-cost plan risk being moved to higher-cost standard or tiered plans.

Transition timeline for SAVE borrowers

As first reported by Business Insider, the first batch of notices tells borrowers that SAVE is no longer available and that they must select a new repayment plan within 90 days. A notice reviewed by the outlet carries the subject line, "You have 90 days to select a new repayment plan," while federal servicer EdFinancial says it was directed by the U.S. Department of Education to move borrowers out of the plan following a settlement.

The Education Department says in a recent court filing that September 29 is the earliest point at which borrowers will have to switch plans, but the transition is occurring in waves. Nelnet says in a FAQ on its website that, because it is notifying 3 million borrowers, its customers will receive notices between July 2026 and March 2027, which means some could have until the end of May 2027 to leave SAVE.

Borrowers remain in SAVE forbearance while their applications for a new repayment plan are processed, according to Nelnet. During that period, interest continues to accrue.

Repayment choices and sector impact

Undersecretary of Education Nicholas Kent says at a conference this week that servicers will contact up to 250,000 borrowers each week to notify them of their deadlines to switch. If borrowers do not choose another option, they will be moved to the standard repayment plan or a new tiered plan, which are the costliest options mentioned in the transition process.

SAVE was introduced during the Biden administration as a repayment plan with lower monthly payments and a shorter route to loan forgiveness. In March, the Trump administration announced a settlement ending the plan and urged SAVE borrowers to enroll in its new Repayment Assistance Plan, which became available on July 1.

Kent says in a July 1 post on X that nearly 46,000 borrowers have already submitted applications for the Repayment Assistance Plan. The shift marks a significant operational change for federal loan servicers and could raise repayment costs for borrowers who do not move into a lower-cost alternative.

Our earlier coverage of Senate Democrats’ pushback against an Office of Management and Budget (OMB) proposal examined a rule they said would broaden executive control over federal financial assistance and allow grants to be suspended or terminated with less notice and oversight. We noted lawmakers’ warnings that the change could inject politics into funding decisions, create compliance uncertainty for recipients, and disrupt support for public safety, health, and research programs.

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