SAVE Student Loan Deadline Next Week: What Borrowers Should Know - Newsweek

Some federal student loan borrowers enrolled in the now-defunct Saving on a Valuable Education (SAVE) repayment plan face a deadline next week to choose a new repayment option or risk being automatically moved to a new plan.

The first deadlines for some borrowers will arrive September 29, 90 days after federal loan servicers began sending notices to SAVE borrowers on July 1. However, September 29 is not a nationwide deadline: Borrowers are being contacted in waves and have 90 days from the date of their individual servicer notice to select another plan.

SAVE is no longer available following a federal court order that ended the plan earlier this year. The U.S. Department of Education said borrowers who do not choose their new repayment plan during the window will be automatically placed in either the Standard Repayment Plan or the new Tiered Standard Plan. Other options are available if borrowers choose them.

"If you miss the 90-day window in your servicer notice, you can be automatically placed into the Standard or Tiered Standard Repayment Plan, where the payment is based on your loan balance rather than your income," Kaydee Ambas, consumer finance educational instructor at Earnest, told Newsweek.

"For borrowers who chose SAVE for its lower, income-based payment, these default options could mean unexpectedly higher monthly bills, because the automatic transition process does not account for what each borrower can afford."

The immediate deadline applies to SAVE borrowers whose servicers sent notices at the beginning of July. A borrower whose notice is dated July 1, the first day notices were sent, reaches the end of the 90-day period on September 29. Someone who received a notice later has a later deadline that will most likely arrive in the next couple of months.

Loan servicers are using different schedules to contact their borrowers. MOHELA says it is notifying affected borrowers in waves between July and October, with each borrower receiving 90 days from the date of their notice. Edfinancial says its SAVE notifications went out between July 1 and August 15.

Ambas said: "With the first deadline approaching, borrowers should log in to their servicer account, confirm their specific date, and use the federal Loan Simulator to compare what IBR, RAP, and standard repayment would actually cost them each month."

Federal Student Aid's repayment calculator allows borrowers to compare plans for which they may be eligible, including estimated monthly payments and the estimated total amount repaid over the life of the loan.

"The worst outcome is letting the deadline pass and discovering the government chose a payment you cannot comfortably afford," Ambas said.

A borrower who misses their deadline will not remain on SAVE indefinitely. Their servicer will automatically move them to a Standard Repayment Plan or Tiered Standard Plan, depending on their loans and disbursement dates.

For borrowers whose federal loans were all disbursed before July 1, 2026, the traditional Standard Plan generally involves fixed payments designed to repay the debt over 10 years. The new Tiered Standard Plan, introduced on July 1, provides fixed repayment periods of 10, 15, 20 or 25 years, with the term determined by the amount owed.

John Wittelsberger, a certified financial planner who specializes in education planning at Armstrong, Fleming & Moore, said the Standard Plan can make sense for some borrowers who can afford the larger payment and want a defined end date.

"The standard repayment plan works exactly as it sounds. Payments are fixed, the payoff timeline is clearly defined, and the loan balance steadily declines toward a known endpoint," he told Newsweek.

For higher earners, Wittelsberger said, the approach can offer certainty and may reduce the amount of interest paid compared with stretching repayment over a longer period.

The new Repayment Assistance Plan, or RAP, which became available on July 1, bases payments on adjusted gross income and the number of dependents claimed on the borrower's tax return. Payments range from a minimum of $10 per month to as much as 10 percent of adjusted gross income, depending on earnings, and are reduced by $50 per month for each qualifying dependent. The repayment period can extend to 30 years.

Wittelsberger said RAP could provide flexibility for borrowers facing periods of high expenses, career changes or uneven income.

"Used intentionally, it can preserve short-term flexibility and support parallel goals like investing, homeownership or family planning," he said.

However, he said that a smaller monthly payment will result in a longer repayment period.

Some borrowers may also qualify for Income-Based Repayment, or IBR. Under IBR, payments are generally 10 percent or 15 percent of discretionary income depending on when the borrower first received their loans, and are capped at the amount that would be owed under a 10-year Standard Plan. Remaining balances can be forgiven after 20 or 25 years of qualifying repayment, depending on the borrower. Eligibility depends in part on loan type and disbursement date.

Federal Student Aid says borrowers should check their StudentAid.gov dashboard to confirm their loan types and disbursement dates because those details affect which repayment plans are available.

Contact Newsweek editors on this story: Ben Kelly and Dave Siminoff.