Borrowers get more time to leave SAVE repayment plan

In a legal filing, the Department of Education said borrowers will not be required to move off the SAVE plan until September 29 "at the earliest." The department added it is transitioning borrowers off the plan in waves, so most borrowers "will get even more time than that." Previously, it said starting July 1 borrowers would begin receiving notices of their 90-day timeline to transition to a new plan, and that those who do not take action would be automatically placed in the most expensive plan.

This update responds to a lawsuit filed in March that challenged the department's decision to eliminate the SAVE plan, a Biden-era program that offered more affordable monthly payments and a shorter timeline to debt relief. Public Goods Practice, which represents the borrowers, filed a motion asking the court to pause the forced transition while the rest of the case is decided.

The new filing arrived days before the administration's broader student-loan overhaul takes effect on July 1, bringing new repayment plans and borrowing caps.

United States

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