politics
Over 300,000 Borrowers Leave SAVE Plan After Court Ends It
More than 300,000 federal student loan borrowers have left the SAVE repayment plan in recent weeks. Millions remain enrolled as notices are scheduled to begin July 1.
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More than 300,000 federal student loan borrowers have exited the SAVE repayment plan in recent weeks. Millions remain enrolled ahead of scheduled notices from loan servicers. U.S. Department of Education, told CNBC on Thursday that borrowers still in SAVE could face higher monthly payments if they do not switch plans.
Kent said the situation creates a problem for borrowers who are not recognizing the benefit of making their payments. Kent stated that SAVE borrowers have to move.
The Biden administration launched the SAVE plan in 2023 as a low-cost repayment option. A federal appeals court ended the plan earlier this year. The Trump administration is now transitioning borrowers out of SAVE.
Borrowers are expected to receive notices from loan servicers starting around July 1. They will generally have about 90 days after receiving notices to choose a new repayment plan. Kent said deadlines may vary throughout the summer.
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