In a move that has sent shockwaves across the student loan community, the Department of Education has formally agreed to dismantle the SAVE repayment plan as part of a legal settlement with a coalition of Republican-led states. This marks one of the most significant shifts in federal student loan policy in decades, affecting an estimated 7.7 million borrowers who were enrolled in or attempting to enter SAVE.
The settlement stems from a lawsuit initiated by Missouri, which argued that SAVE was not simply a new repayment option but effectively a forgiveness program disguised through reduced payments and eliminated interest accrual. Yesterday’s news confirmed what many had feared: SAVE is permanently shutting down, no new applications will be accepted, and pending applications will be denied.
Servicers will now begin transitioning borrowers into alternative plans much earlier than the originally proposed timeline of 2028. Borrowers will be offered either a fixed standard plan or entry into the new Repayment Assistance program—a 30-year payment schedule that could significantly increase total costs over time.
For many borrowers, SAVE offered the lowest monthly payments ever available under a federal income-driven program. With undergraduate percentages as low as 5% of discretionary income and full interest subsidies, SAVE reduced balances for millions.
The dismantling of SAVE means:
This transition is not optional—borrowers must proactively choose a new repayment plan, or one will be chosen for them.
Catalina, CEO of LoanSense, has been emphasizing one message: Don’t wait for your servicer. Act now.
LoanSense recommends enrolling in Income-Based Repayment (IBR) as soon as possible—ideally before January—because:
1. Submit an IBR application immediately
Borrowers should not wait for servicers, who will soon be overwhelmed.
2. Use the lowest proof of income allowed
This can reduce your monthly payment substantially.
3. Set up autopay
Yesterday’s reports highlighted rising delinquency rates—don’t risk a 90-day late.
4. Update PSLF employment certification
Especially critical for public servants transitioning out of SAVE.
The end of SAVE represents a dramatic reversal of one of the most borrower-friendly programs ever implemented. Payments will go up. Interest will resume. And millions could become locked into unnecessarily long repayment timelines if they fail to act.
Borrowers still have time—but the window is short.
LoanSense can help you choose the right plan, gather documents, and submit your IDR application correctly the first time. What you do now may save you thousands over your repayment lifetime.
Not sure which repayment plan is right for you? Don’t wait for your servicer to assign one — especially now that millions are at risk of being placed into a 30-year repayment program.
LoanSense is offering a free personalized repayment plan when you sign up today.
With your free plan, you’ll discover:
Plus, once you sign up, you’ll automatically receive weekly updates so you never miss important policy changes or forgiveness opportunities again.
👉 Get your FREE repayment plan now at app.myloansense.com
Your savings — and your financial future — depend on what you do next.