BAKERSFIELD, Calif. (KERO) — Millions of student loan borrowers will soon need to choose a new repayment option as the "Saving on a Valuable Education," or SAVE plan, is being eliminated.
Starting July 1, federal loan servicers will begin issuing notices to borrowers, asking them to leave the SAVE plan and enroll in a new repayment plan within 90 days. Borrowers will be contacted by their loan servicers in stages.
The U.S. Department of Education said 7.5 million people are currently enrolled in the program.
The Biden administration introduced the SAVE plan in 2023. The Department of Education said the repayment program promised to lower monthly bills for millions of student loan borrowers.
Several Republican-led states sued to block the plan, arguing the program exceeded the administration's authority and claiming American taxpayers would eventually be saddled with the burden. A federal appeals court officially blocked the program last month.
In April 2025, Betsy Mayotte, president of the Institute of Student Loan Advisors, addressed the ongoing changes.
"There has never been a period more chaotic than the last five years. And that has caused a lot of confusion and anxiety with borrowers," Betsy Mayotte said.
"If you are in default, I strongly recommend that you look into loan rehabilitation or consolidation to get out of default to prevent these involuntary collection activities," Mayotte said.
Borrowers can enroll in different plans, including the new Tiered Standard Plan. This option will offer fixed terms of 10, 15, 20, or 25 years based on a borrower’s total outstanding loan balance, giving borrowers with higher debt lower monthly payments and more time to repay.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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