SAVE Is Officially Ending: What This Means for Your Student Loans and What Happens Next
The U.S. Department of Education announced a proposed settlement with the State of Missouri that would formally end the SAVE Plan.
The court still has to approve the settlement, and that process can take weeks or even months. Until a court signs off, nothing about your current repayment plan changes. Your status, your plan, and your payment amount stay as they are for now.
If the court approves the settlement, SAVE disappears entirely, and every borrower currently in SAVE will be moved into a different repayment plan.
The Four Big Takeaways
1. SAVE is dead—officially.
This isn’t a trial balloon or a temporary pause. If the settlement is approved, SAVE will not return.
No new borrowers will be allowed into SAVE.
Pending SAVE applications will be denied.
The Department will move all 7+ million SAVE/REPAYE borrowers into other plans.
SAVE is ending because the Department agreed to dismantle the program to resolve the lawsuit brought by Missouri and several other states.
2. Every SAVE borrower will be required to switch plans.
Once the court signs off, borrowers in SAVE will have a limited window to choose a new repayment plan.
You will be given a short period to pick a new IDR plan.
If you don’t act, the Department will move you automatically into another plan.
The Department has not said which plan that will be or how long the selection window will last.
Crucially, early forgiveness under SAVE will not happen.
That includes things like the $12,000 forgiveness after 10 years of qualifying payments — that track disappears with SAVE.
3. Nearly all of the 2023 IDR improvements are being erased.
The 2023 rule changes are what made SAVE cheaper and faster than the older IDR plans. Under this settlement, most of those improvements go away.
What’s gone:
The lower 5% payment formula for undergraduate loans
The higher discretionary income protection (the part that shielded more of your income from calculation)
The shortened forgiveness timelines based on your original loan balance
The $12,000 / 10-year forgiveness track
The interest-saving provisions tied to SAVE (which prevented unpaid interest from ballooning your balance)
What survives:
A technical rule that allows certain deferments and forbearances to count toward IDR forgiveness.
Everything else reverts to the older, less generous structure.
4. A new IDR rulemaking is coming—and RAP is on deck.
The Department now has to go back through the negotiated rulemaking process to rebuild the income-driven repayment system from the ground up.
During that process, the Department will consider:
Fully repealing the SAVE rule
Officially sunsetting PAYE (which was already expected)
Sunsetting the original ICR plan (also already set to end)
Laying the groundwork for the new Repayment Assistance Plan (RAP), which must be available by July 1, 2026
In other words: borrowers will be placed into existing IDR plans temporarily until the new system—featuring RAP—is ready.
The settlement also includes a ten-year requirement that the Department notify Missouri before cancelling more than $10 billion in loans in a single month.
What This Means for Borrowers Right Now
Do I need to do anything today?
No.
The court has to approve the settlement before anything changes. Until that happens:
Your current repayment plan stays the same.
Your payment amount, status, and plan do not change.
Will my SAVE payments go up?
Most likely yes, once the transition happens.
SAVE’s low-payment formula and its income protections are exactly the features that are being wiped out:
The 5% formula is gone.
The higher income protection is gone.
So when you’re moved into a new IDR plan, you should expect your payment amount to change, and in many cases, go up.
Will SAVE’s early forgiveness still happen?
No.
Once the settlement takes effect:
The Department cannot issue forgiveness under SAVE.
The $12,000 forgiveness after 10 years of qualifying payments will not be available.
If you were counting on that specific early forgiveness track, assume it is off the table.
What plan will I be moved into?
Right now, the Department has not said which plan will be the default landing spot for former SAVE borrowers.
What we do know:
You will be given a short window to choose a new repayment plan.
If you don’t choose, the Department will move you automatically into another plan.
They haven’t identified which plan that will be or exactly how long you’ll have to decide.
The Department will send:
A notice explaining your options,
Your deadline to choose, and
Instructions on how to make your selection.
Once you submit your choice, your loan servicer will:
Process the plan change, and
Recalculate your payment under that new plan.
What happens to the SAVE forbearance and $0 payments?
Those were temporary, administrative stop-gap measures during the litigation.
Once the settlement is final and borrowers are moved into new plans:
The Department will unwind the special SAVE forbearance, and
The $0 payments tied to that litigation posture will end.
You will then be repaying under whatever new plan you selected (or were placed into).
Does this affect PSLF?
No. PSLF continues.
If you’re working toward Public Service Loan Forgiveness, that program remains in place.
Your payment amount may change once you’re in a new IDR plan, but qualifying employment + qualifying IDR payments still count toward PSLF.
Does this affect the one-time IDR recount forgiveness?
No.
The one-time IDR recount is separate from the SAVE litigation:
The recount and associated forgiveness process continues as a distinct program.
This settlement does not cancel or undo the recount.
Is there a new plan coming?
Yes.
A new plan called the Repayment Assistance Plan (RAP) is on the way, and it must launch by July 1, 2026.
In the meantime:
SAVE borrowers will be moved into existing IDR plans (like IBR or other remaining options)
Once RAP is available, it will become part of the new IDR system built through rulemaking.
Where will I go to switch plans?
When the transition begins, borrowers will:
Choose a new repayment plan at StudentAid.gov/idr.
Find official updates from the Department at StudentAid.gov/courtactions.
As borrower instructions are released, I’ll be tracking them closely and updating my clients and readers so you don’t have to decode this alone.
What Happens Next
Here is the road map from here:
The court reviews the settlement for approval.
The Department publishes instructions for all SAVE borrowers.
Borrowers receive a deadline to choose a new repayment plan.
The Department begins the new IDR rulemaking process, including what to do with PAYE, ICR, and SAVE.
RAP preparations continue so that the new Repayment Assistance Plan is ready for July 1, 2026.
As the Department releases concrete borrower instructions—deadlines, default plans, and step-by-step procedures—I’ll break down each step and explain what it means in plain language. I’ll keep you updated as soon as new repayment options and deadlines are announced.
Thanks to my colleague and student Loan Lawyer Stanley Tate at https://www.tateesq.com