Borrowers May Have Up To 12 Months To Move Student Loans To Other Repayment Plans

Key Points:

• The federal SAVE student loan repayment plan, designed to be highly affordable, is being phased out earlier than planned due to legal challenges and a court-ordered settlement, requiring borrowers to switch to other repayment plans.
• Borrowers currently in the SAVE plan must select a new repayment plan or risk being moved into a Standard plan, which could lead to higher monthly payments and paused forgiveness progress.
• The Education Department initially indicated borrowers would receive notices starting July 1, 2026, with 90 days to switch plans, but new information from loan servicer Nelnet suggests some borrowers may receive notices as late as March 2027, effectively giving them up to 12 months to transition.
• Advocacy groups criticize the conflicting timelines and suggest the Department’s urgent notices may have overstated the immediacy of the deadline, potentially causing unnecessary borrower anxiety.
• Borrowers are advised to consider their financial situations and repayment goals carefully, as some may choose to switch plans earlier to resume loan forgiveness progress, while others may have more time before needing to act.