SAVE Plan is phasing out, leaves many borrowers to find a different plan

The SAVE Plan, a student loan repayment plan, is phasing out. Those on the plan will have to move to another plan.

By Kai Lee

Late last year, the Trump administration officially announced that it would be phasing out the Saving on Valuable Education (SAVE) Plan, because courts found it to be illegal. According to a Brookings article, the plan was determined to be illegal largely because it exceeded the authority of former Secretary of Education, Miguel Cardona, who implemented it. 

The Department of Education explained that borrowers on the plan have 90 days, starting July 1, to switch to a different plan. 

The SAVE Plan is a repayment plan for student loans that aimed to reduce the cost of college in several ways. It was designed to reduce payments on undergraduate loans by half. It also brought loan payments to borrowers with discretionary income below about $15 to $0 and ordered the Department of Education to stop charging monthly interest that was not covered by the SAVE Plan, according to The American Presidency Project.  

However, district courts began blocking parts of the plan in the summer of 2024, leading to continued legal battles in federal courts. When President Trump came into office, he and his administration supported and encouraged the decision. In a statement, the Department of Education said that the additional price taxpayers would pay would be unfair and said it was done without congressional approval. This eventually led them to phase it out.   

The SAVE Plan was also initially intended to end in 2028, but the date was moved forward to July 2026.  

Alternatives to the SAVE Plan:  

There are two different options for borrowers:  

• The Repayment Assistance Plan (RAP), which the Trump administration is starting and will be available July 1. The RAP is the only option for new borrowers on the SAVE Plan. 

• Various Income-Driven Repayment (IDR) plans. These include Income-Based Repayment (IBR), Pay as you Earn (PAYE) and Income Contingent Repayment  (ICR) Plans. However, PAYE and ICR will be phased out by June 2028. These options are available only to borrowers who have been on the SAVE Plan for longer.  

“Individually, it may be daunting to deal with this on their first or even second time,” JaCinda Barnes said. Barnes is the Associate Director at the Office of Student Financial Aid & Scholarships at UW Tacoma. 

Advice: 

People on the SAVE Plan will have to find new plans, Barnes explained.  

“I recommend to look at student loan information on studentaid.gov,” Barnes said. She added that this site will also allow people to find their servicer.  

She also suggested looking, specifically, at the Loan Simulator that studentaid.gov offers, which allows borrowers to compare loan repayment plans, simulate borrowing more and access other potentially helpful services. 

“We direct them to StudentAid.gov/LoanSimulator,” Barnes said. “UW Tacoma’s financial aid office would tell them what to look for on the site.” 

Barnes added that if current or former UW Tacoma students have any questions, the Financial Aid Office will answer them or refer people to an office or someone else who can answer. 

“If they have problems, don’t give up,” Barnes said. “There are options, like deferment or forbearance, income-driven repayment options. There is also the studentaid.gov tool.” 

For more student loan information and help: 

• Contact UW Tacoma’s Office of Student Financial Aid & Scholarships for advice or questions. You can also visit them during their drop-in hours. 

• Visit StudentAid.gov to learn more about court actions. 

• Look at The College of New Jersey’s Office of Financial Aid for what this change means for borrowers. 

• See The Brookings Institution for a more in-depth explanation of the legal aspects of the SAVE Plan ending.