Starting July 1, millions of federal student loan borrowers must choose a new repayment plan or risk being automatically enrolled in one, as the SAVE plan officially ends.
The SAVE plan, introduced during the Biden administration, lowered monthly payments for many federal student loan borrowers. The Education Department said loan servicers will begin notifying borrowers in the SAVE plan that they have 90 days to select a new repayment option. If borrowers do not act, they could be moved into a standard plan, which may result in higher monthly bills.
The changes also affect future borrowers, including graduate students, some professional students, and parents using Parent PLUS loans.
Supporters of the changes say they simplify a confusing system and help limit runaway debt. However, borrower advocates warn that some individuals may see their payments increase and some families may face fewer options to cover college costs.
The Education Department advises borrowers in the SAVE plan to watch for notices from their loan servicer and ensure their email and mailing addresses are up to date.
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