Student Loan SAVE Plan 2026: What Happens When the Plan Ends

The Saving on a Valuable Education (SAVE) plan is being eliminated under a settlement between the federal government and states that had challenged the program. The agreement, reached in December 2025, still requires court approval. If it is approved, the roughly seven million borrowers currently in SAVE—many in forbearance with no payments due—will likely have to switch to another income-driven repayment plan during 2026.

Borrowers can transition to Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), or Pay As You Earn (PAYE). Payments under those plans are often higher than under SAVE, which was designed to offer lower monthly amounts. One change that helps: IBR is now available without the previous "partial financial hardship" requirement, so more borrowers can qualify regardless of income. ICR and PAYE are set to be phased out by July 1, 2028 under the One Big, Beautiful Bill Act, so anyone choosing those will face another transition later.

What SAVE Borrowers Should Do

Borrowers in SAVE should watch for notices from their servicer and the Department of Education about the transition timeline. When the plan ends, they will need to select a new plan or be placed into a default option. Comparing monthly payment amounts, forgiveness timelines, and tax implications (e.g., forgiven amounts that may be taxable) is important before choosing IBR, ICR, or PAYE.

Why SAVE Is Ending

The settlement resolved litigation brought by Missouri and other states that argued the SAVE plan exceeded the administration’s authority. The court must still approve the settlement before the phase-out takes effect. Exact dates for recertification and plan changes will depend on that approval and on how the Education Department and servicers implement the transition.

What to Watch in 2026

Congress could pass new legislation affecting income-driven plans or forgiveness. Servicer communications and updates on studentaid.gov will be the primary source for deadlines and options. Borrowers should keep contact information current and open servicer emails and letters so they do not miss transition deadlines.