The Department of Education (ED) on Friday began notifying 7.5 million federal student loan borrowers trapped in the defunct SAVE Plan that they must transition to a lawful repayment option or face automatic reassignment.
Federal loan servicers will start delivering formal 90-day transition notices on July 1, according to the Department’s press release. Anyone still enrolled when their individual deadline expires will be moved into the Standard Repayment Plan or a new Tiered Standard option that debuts the same day.
“Today’s guidance, which every borrower enrolled in the defunct SAVE Plan will receive over the next week, puts the Biden Administration’s illegal student loan bailout agenda to rest once and for all,” Under Secretary of Education Nicholas Kent said in the announcement. “For years, borrowers have been caught in a confusing cycle of uncertainty, but the Trump Administration’s policy is simple: if you take out a loan, you must pay it back.” (RELATED: Blue State Taps Massive ‘Emergency’ Fund To Hand Out Student Loans)
The Biden administration created the Saving on a Valuable Education program as its third attempt at mass debt cancellation. Federal, district, and appellate courts repeatedly blocked the plan, the Department said. Estimates put the program’s cost to taxpayers above $342 billion over a decade.
Borrowers have been caught in a confusing cycle of uncertainty, but @POTUS’ policy is simple: if you take out a loan, you must pay it back.
Starting today, borrowers enrolled in the illegal SAVE Plan will receive guidance on how to enter a legal repayment plan. pic.twitter.com/ZQ1OxbRDH4
— ED Under Secretary (@EDUnderSecKent) March 27, 2026
The 8th U.S. Circuit Court of Appeals delivered the final blow on March 9, overturning a district judge’s earlier dismissal and converting a December 2025 agreement into a binding order that permanently killed the program, Fox Business reported.
Meanwhile, the millions still carrying SAVE debt have been in a payment freeze since July 2024 as courts weighed the plan’s legality, CNBC reported. Their balances have swelled since last August, when interest began accruing again, eroding any progress toward eventual forgiveness.
The Department’s announcement also outlined two repayment tracks arriving July 1. The Repayment Assistance Plan ties monthly bills to a borrower’s income and number of dependents while protecting on-time payers from spiraling interest. A separate Tiered Standard Plan lets borrowers lock in fixed terms ranging from 10 to 25 years depending on how much they owe.
