For millions of federal student loan borrowers, the coming end of the Saving on a Valuable Education (SAVE) plan has left a mix of confusion and cautious relief. After a court ruling blocked the plan earlier this year, Congress finalized its termination through the One Big Beautiful Bill (OBBBA), signed into law on July 4, 2025.

The law not only eliminates SAVE but also rewrites the framework for income-driven repayment (IDR) plans, phasing out several existing ones by July 2028. The new Repayment Assistance Plan (RAP) is set to launch in July 2026.

Until then, borrowers enrolled in SAVE are stuck in administrative forbearance: they don’t owe payments, but interest is again accruing as of August 1, 2025.

That means loan balances are growing even as borrowers wait for the Department of Education (ED) and the courts to decide when repayment will resume. But should you still be waiting in the SAVE forbearance? Probably not much longer... here's why.

What's Happening Now: Forbearance, Interest, Uncertainty

Borrowers in SAVE aren’t required to payments right now - but that’s not as good as it sounds. While forbearance temporarily halts payment requirements, it does not count toward Public Service Loan Forgiveness (PSLF) or future IDR cancellation.

This pause effectively freezes progress toward forgiveness programs, and with interest accumulating, balances can rise by hundreds or even thousands of dollars each year.

Adding to the uncertainty: the Department of Education hasn’t yet announced when SAVE borrowers must resume payments. They likely won't have to (because they legally cannot) - but they will be required to migrate to another repayment plan so.

It seems the most likely scenario right now is that borrowers can stay in the SAVE forbearance until they opt for another choice. The current negotiated rulemaking committee is deciding how the end will come - with the Department of Education wanting borrowers to pick, or otherwise return to Standard repayment (then default), and other groups wanting it to be an automatic migration to RAP.

For now, the Department is signaling patience. Several loan servicers, including Nelnet, have already extended SAVE forbearance notices out to 2028, though that doesn’t mean payments will stay paused that long. And it also doesn't mean you should be waiting for the benefit of your own financial situation.

The next court hearing was supposed to be in late October, but will be delayed until 30 days after the government shutdown is over. However, borrowers shouldn't expect much news from these - it's more just logistics than any overall change.

What Borrowers Can (And Should) Do Now

While the timeline remains unclear, borrowers can still make meaningful choices about their loans. The most immediate question is whether to leave SAVE now or wait for RAP to start.

Option 1: Switch To Income-Based Repayment (IBR)

Borrowers who want to continue earning credit toward forgiveness should strongly consider switching to IBR, especially if they work in public service or have low incomes. This is especially true for borrowers impacted by the government shutdown.

Under IBR:

• Post-2014 borrowers pay 10% of discretionary income while pre-2014 borrowers pay 15%.
• Payments may be as low as $0 for low-income earners.
• Time spent in IBR counts toward PSLF and IDR cancellation.

This is a strategic move for those on the path to forgiveness or with incomes low enough to maintain affordable (or even $0) payments.

Importantly, borrowers switching now will have their monthly payments calculated based on their 2024 tax return, which could mean lower payments if their income rose in 2025.

Finally, PAYE could be the better option for some for the next year or two, but since it's being phased out, we generally recommend IBR.

Option 2: Wait For The Repayment Assistance Plan (RAP)

For borrowers with low or middle incomes, the Repayment Assistance Plan (RAP) could be the most affordable long-term option.

Expected to start in July 2026, RAP payments will range from $10, up to 10% of Adjusted Gross Income (AGI).

This could result in lower payments than IBR for many borrowers - especially for those making less than $100,000 per year. Staying in forbearance until RAP begins could make sense for those who:

• Cannot currently afford payments under IBR, or
• Want to see whether RAP offers better terms.

However, remaining in forbearance means no progress toward forgiveness and continued interest accrual.

Option 3: Move to Standard Repayment

Borrowers who can afford steady payments and want to pay off their debt faster might consider Standard, Extended, or Graduated plans. These plans are less flexible but ensure predictable repayment and completion within a fixed term.

Special Considerations: PSLF, Forgiveness, Income, Taxes

Borrowers pursuing Public Service Loan Forgiveness (PSLF) should not remain in SAVE forbearance any longer than necessary. Since PSLF requires 120 qualifying payments under an IDR plan, months spent in SAVE’s pause don’t count.

Yes, you may be eligible for the PSLF “buyback” process, which allows them to make retroactive payments to count months of forbearance. However, this is currently limited to borrowers who already qualify for PSLF forgiveness now - not those still working toward the 10-year mark. And the timeline is taking upwards of a year.

Borrowers who’ve made 20 years (240 months) or 25 years (300 months) of qualifying IDR payments also need to move repayment plans. Forgiveness cannot be processed under the SAVE plan, but it can under IBR, ICR, or PAYE. If you've reached your time-based loan forgiveness milestone, you should move to one of the eligible plans.

It's important to note that the Department of Education clarified that no tax bomb will apply to loan forgiveness in 2025. And the date of your forgiveness eligibility will be when you cross that time-based milestone - not when your forgiveness is actually processed.

Who Should Wait? While most borrowers should leave SAVE, there are a few who may want to wait. If you're going to retire or see your income significantly decrease in the next year, then waiting to certify your income at the new lower level may be smart.

Finally, if you need to resolve larger budget issues (because you cannot afford either IBR or RAP), then you should be using this time wisely to do so.

What This Means For Borrowers

The transition away from SAVE marks the end of one of the most affordable repayment options ever created. But for many, it also opens the door to simpler, potentially more sustainable plans like IBR or RAP.

Still, borrowers must take an active role in navigating this period:

• If you’re pursuing forgiveness: Move to IBR now so your payments continue counting.
• If you’re focused on affordability: Wait for RAP’s launch in mid-2026.
• If you can afford payments and want to finish faster: Consider Standard or Extended repayment.

The worst move is to not have a plan. You know your payment plan options: Standard, IBR, or future RAP. Staying in SAVE indefinitely will only increase your balance and delay progress toward loan forgiveness.

Key Takeaways

The SAVE plan’s end has reshaped the repayment landscape once again. While uncertainty remains about timing, the choices borrowers make in the coming year will define how much they pay and how soon they can be debt-free.

With interest ticking upward and forgiveness clocks paused, the most proactive borrowers will use this time to evaluate their next steps, whether that means switching to IBR now or preparing for RAP’s arrival in 2026.

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