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U.S. Education Department Begins Moving Borrowers from SAVE Plan to New Repayment Options Starting July 1
The Education Department will send notices this week to borrowers enrolled in the SAVE plan, giving them three months to select a new repayment option. Borrowers who do not choose will be placed in the Standard plan, with the first removals set for the end of September 2026. New rules also limit future borrowing and change Public Service Loan Forgiveness eligibility.
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The U.S. Department of Education will begin sending notices this week to borrowers enrolled in the SAVE plan as part of federal student-loan reforms that take effect July 1, 2026, @Forbes reported. Recipients will have three months to select a new repayment plan.
Those who do not choose will be placed into the Standard repayment plan, with the earliest removals occurring at the end of September 2026. The changes stem from the One Big, Beautiful Bill Act passed last year and a federal court settlement earlier in 2026.
The legislation phases out the PAYE and ICR income-driven repayment plans by 2028 and creates the Repayment Assistance Plan and the Tiered Standard Repayment plan.
Borrowers who take out new federal loans or consolidate existing loans on or after July 1 will be limited to those two options. Current borrowers already in repayment will retain access to the IBR plan. Additional regulations effective July 1 place limits on future federal student-loan borrowing amounts and bar Parent PLUS borrowers from income-driven repayment plans or loan forgiveness.
These PSLF changes were not included in the legislation and were not passed by Congress. Senator Bernie Sanders stated on June 30 that the Trump administration will remove over seven million Americans from the SAVE plan starting July 1. He added that the average college graduate will be forced to pay up to $4,000 more each year, or about $244 a month.
The Institute for College Access and Success said the median U.S. household will see monthly payments increase by $400 under the Repayment Assistance Plan. The Education Department has updated the income-driven repayment page on StudentAid.gov to remove SAVE information and has revised its repayment-plan estimator to include the new options.
