Federal student-loan borrowers who were enrolled in the Biden-era SAVE repayment plan face the first major deadline to select a new repayment option on Nov. 1, after the Education Department granted a 30-day extension for borrowers to act.
What the deadline means
Beginning July 1, the department began sending notices giving borrowers 90 days to transition off SAVE after the plan was eliminated by the current administration. The original end-of-September deadline was extended by 30 days, moving the first wave of transitions into early November. The department said borrowers who do not choose a new plan will be placed into a standard or tiered repayment plan.
“Borrowers who have not switched plans should take immediate action by visiting StudentAid.gov and selecting a new repayment plan today,” an Education Department spokesperson said.
How many have acted
The Education Department confirmed to Business Insider that nearly 2 million borrowers — of about 7.5 million who had been enrolled in SAVE — have selected a new repayment plan. The department recommended that borrowers enroll in its new Repayment Assistance Plan, an income-driven option that took effect July 1.
- Nearly 2 million borrowers have picked a new plan.
- 7.5 million borrowers were enrolled in SAVE before the transition process began.
- Borrowers who do not act will be assigned to a standard or tiered plan.
Why borrowers are concerned
Borrowers who enrolled in the Repayment Assistance Plan over the summer have reported higher monthly bills than under SAVE, with some saying payments increased by hundreds of dollars. That shift comes as federal student-loan defaults have risen: Federal Student Aid data show 9.3 million borrowers currently in default and another 1.3 million projected to enter default within six months.
The Education Department did not provide a public timetable for when borrowers who fail to select a plan will be moved into the standard plan, and different federal servicers have sent final notices in waves.
What borrowers can do
The department’s message to borrowers is straightforward: visit StudentAid.gov to review and select available repayment options. The Repayment Assistance Plan is the department’s recommended income-driven option; borrowers should compare plan features, monthly payment estimates and forgiveness timelines before enrolling.
The Nov. 1 deadline applies to the first cohort of borrowers who received the department’s notice cycle that began July 1. Additional groups of SAVE enrollees will face staggered deadlines based on when they received their initial 90-day notice.
Officials and servicers continue to communicate with borrowers about plan choices and consequences for nonselection, while advocates and borrowers report higher bills during the transition away from SAVE.
