SAVE Student Loan Repayment Plan Ending After Court Settlement

The SAVE student loan repayment plan is ending after a court settlement, leaving millions of borrowers who enrolled in the program scrambling to find alternative repayment options. WAFB reported on June 8, 2026, that the plan, which offered lower monthly payments based on income, could not survive the legal challenge brought against it.

SAVE, which stood for Saving on a Valuable Education, was introduced by the Biden administration as an income-driven repayment option. It calculated monthly payments as a percentage of discretionary income and offered loan forgiveness after a set number of years. Millions of borrowers enrolled after it launched.

Republican-led states sued to block the plan, arguing that the administration had exceeded its authority in designing the program's forgiveness provisions. Federal courts agreed, and the settlement effectively ends the plan.

Borrowers who were enrolled in SAVE will need to switch to a different repayment plan. Options include other income-driven repayment plans, such as Income-Based Repayment and Pay As You Earn, as well as standard and graduated repayment plans. The Department of Education has said it will notify affected borrowers about their options.

The end of SAVE comes as the student loan landscape is already under significant stress. Approximately 2.6 million federal student loan borrowers entered default in the first quarter of 2026 following the end of pandemic-era protections. Wage garnishment has resumed for defaulted borrowers, with the government able to take up to 15 percent of take-home pay.

Student loan advocates are urging borrowers to act quickly to avoid default. They recommend contacting loan servicers directly to discuss repayment options and to apply for income-driven plans before any grace periods expire.