The SAVE plan is ending, but the exit deadlines are different for each borrower. Some people get notices now, others get them later. Will Sealy, CEO of Summer, a company that guides loan holders, says: "There isn't one universal exit deadline, which muddies the waters for borrowers after years of policy changes."
Nelnet, one of the largest student loan servicers, is sending notices to its nearly three million SAVE borrowers from July 2026 through March 2027. Other servicers are also starting their mailings. The earliest possible exit deadline is September 29, 2026, per a court filing, but your deadline depends on when your notice arrives.
It is not necessary to wait for that letter to arrive before taking action. Nancy Nierman, assistant director of EDCAP, a nonprofit that helps borrowers, said, "You do not have to wait for the notices to switch plans." Acting early gives you more time to compare options.
Those plans set payments based on your total loan balance and a fixed term, not on what you earn.
Get your free investing masterclass bonus when you join Market Briefs, our free daily newsletter
You can later apply to an income-driven repayment plan - a plan that ties your payment to your earnings. But if you cannot afford the Standard plan and skip payments, you risk delinquency, which means missing payments. After 270 days of nonpayment, your loans go into default.
After 360 days, the government can garnish your wages, seize tax refunds, and take part of your Social Security. The Trump administration delayed resuming wage garnishments and collections in January, but has not announced when those penalties will restart.
The "one big beautiful bill act" took effect on July 1, changing the menu of repayment plans. A new plan called RAP is now available. Under RAP, your monthly payment is between 1% and 10% of your earnings, with a minimum of $10.
You get a $50 monthly discount for each qualifying dependent. Loan forgiveness comes after 30 years, which is longer than the 20 or 25 years typical on older income-driven plans.
Two older plans - ICR and PAYE - still exist but expire on July 1, 2028 for current borrowers. Carolina Rodriguez, director of EDCAP, says: "The only reason you'd want to be in either plan, then, is if it brings you the lowest monthly payment." The best plan depends on your income, family size, and loan balance, says Will Sealy.
The Department of Education and servicers are managing the transition, but deadlines are scattered across months. Borrowers who act early can avoid the expensive default Standard plan.
For those still in SAVE, the easiest mistake is to wait.
Subscribe to Market Briefs, our free daily newsletter, and claim your bonus investing masterclass
