Student Loan Borrowers Will Have 90 Days To Change Plans As Education Department Upends Repayment
Education Secretary Linda McMahon at the Eisenhower Executive Office Building on the White House complex in Washington, Friday, March 27, 2026. The Education Department announced that millions of student loan borrowers will be forced out of their repayment plan in the coming weeks. (AP Photo/Manuel Balce Ceneta)
Copyright 2026 The Associated Press. All rights reserved.
The Education Department will begin forcing millions of student loan borrowers in an income-driven repayment plan to change programs, according to a Trump administration announcement on Friday. Borrowers who have been enrolled in the SAVE plan will, starting in July, be given just 90 days to select a different plan. If they don’t, they could be placed in a staggeringly expensive Standard repayment plan.
“Borrowers have been caught in a confusing cycle of uncertainty, but @POTUS ’ policy is simple: if you take out a loan, you must pay it back,” said Nicholas Kent, Under Secretary of Education in a statement on X on Friday. The statement was reposted by Education Secretary Linda McMahon. “Starting today, borrowers enrolled in the illegal SAVE Plan will receive guidance on how to enter a legal repayment plan.”
The SAVE plan was created by the Biden administration to be the most affordable income-driven repayment plan option, offering borrowers affordable payments and eventual student loan forgiveness. But nearly eight million borrowers have been stuck in a forbearance for nearly two years after a coalition of Republican-led states filed a legal challenge to block the program. Earlier this month, the Trump administration and the state challengers effectively overturned the SAVE plan after a federal appeals court ordered a district court judge to enter a settlement agreement between the parties that terminates the program. Now, the Education Department will begin forcing borrowers in SAVE to select a different repayment plan. If they don’t, the department will do it for them.
Here’s the latest, and what SAVE plan student loan borrowers should know about the Education Department’s efforts to shift them into other repayment plans.
Education Department To Start Notifying SAVE Plan Student Loan Borrowers To Change Plans
Starting this week, the Education Department will begin sending notices to student loan borrowers enrolled in the SAVE plan that they will need to move their student loans to a different repayment program.
“On March 10, 2026, a federal court issued an order preventing the U.S. Department of Education (ED) from implementing the SAVE Plan and parts of other income-driven repayment (IDR) plans,” said the department in guidance updated on its website on Friday. “Borrowers who have loans in forbearance because they enrolled in or applied for the Saving on a Valuable Education (SAVE) Plan must select a new repayment plan.”
As first reported by The Washington Post, initial notices to borrowers will go out to borrowers today, with subsequent waves of alerts over the next several months. When borrowers are notified that they need to change programs, starting in July they will have just 90 days to select another income-driven repayment plan. If they don’t, they will be placed in a Standard plan, which may be unaffordable for many borrowers. Notifications will continue to be sent out to borrowers with student loans enrolled in the SAVE plan in batches through this summer.
“The U.S. Department of Education is beginning to email people enrolled in the popular Saving on a Valuable Education (SAVE) plan with a stark message: apply for a new plan within 90 days, or we will put you in the Standard Plan, which typically has the highest monthly payments,” said the National Consumer Law Center, or NCLC, in a statement on Friday.
“The Department of Education is putting the burden on student loan borrowers to navigate this complicated mess quickly or face sky-high bills,” said Abby Shafroth, managing director of advocacy at NCLC in the statement. “The Department could have moved borrowers it is kicking out of SAVE into the next most affordable plan, and given people plenty of notice of the change. But instead it’s leaving people to fend for themselves in the midst of a deepening affordability crisis.”
Student Loan Borrowers May Face Higher Payments Under Other Income-Driven Plans
Advocacy organizations had hoped that the Education Department would make transitioning student loan borrowers from the SAVE plan to other income-driven plans easier by automatically placing them in the next-most affordable program. But that won’t happen. Borrowers will need to affirmatively apply for another income-driven plan to keep their payments on their student loans tied to their income.
Even under other income-driven options, borrowers will likely experience higher monthly payments because alternative plans are not as generous as the SAVE plan was in terms of calculating monthly payments. Some student loan borrower advocacy groups have warned that payments could increase by more than 400% for some borrowers compared to what they had been paying on their student loans under the SAVE plan.
The Education Department is planning on launching the Repayment Assistance Plan, or RAP, later this summer. RAP may offer student loan borrowers lower payments than existing income-driven plans such as Income-Based Repayment (or IBR), and will also prevent borrowers’ student loan balances from ballooning due to runaway interest accrual. But RAP will also have a 30-year repayment term, trapping borrowers in debt for far longer than existing income-driven plans. And borrowers getting kicked off of the SAVE plan cannot yet enroll their student loans in RAP. That means some borrowers may have to switch income-driven plans multiple times this year – first to IBR, and then (if they want) to RAP.
“This abrupt change is going to cause hardship for millions of people who are already struggling to manage rising costs in other areas, from gas, to groceries, to healthcare, to rent, and we’re going to see a lot more people default in the coming year,” said Shafroth.
“Millions of hard working people will have no choice but to choose between feeding their families and putting a roof over their head or defaulting on their student loans,” said Braxton Brewington, spokesperson for the Debt Collective, a union representing the interests of student loan borrowers and other debtors.
Income-Driven Repayment System Already Facing Backlogs For Thousands Of Student Loan Borrowers
The new directive to force SAVE plan student loan borrowers into other income-driven repayment plans comes as the Education Department continues to face significant application backlogs associated with these repayment plans. Nearly 600,000 income-driven repayment plan applications remain in a backlog despite more than a year of processing, according to department data released earlier this month. And the news comes just days after the department announced that it would begin transferring operational management of the federal student loan system to the Department of Treasury, which advocates suggested could lead to even more disruptions.
“Trump and McMahon are on track to create what could be the largest administrative disaster in the history of the existence of student loans,” warned Brewington in the Debt Collective’s statement. “Ending the SAVE plan—which has kept millions of debtors’ payments low—while also carelessly transferring tens of millions of student debt accounts to a new agency will be the exact recipe necessary for massive errors to cost families thousands of dollars.”
The Education Department encourages SAVE plan student loan borrowers to apply for a new income-driven repayment plan online at StudentAid.gov. Using the online application system, which allows borrowers to automatically import their income data from their federal tax return, may allow for faster processing so that their student loans can return to repayment more quickly, says the department.
Update on March 27, 2026: This article was updated to reflect that student loan borrowers will have 90 days starting this July to move their student loans into another income-driven repayment plan.
