SAVE Plan Exit Rush Begins— But Millions Of Student Loan Borrowers Haven't Moved Yet

Benzinga_recent_news06-12 14:45

More than 300,000 federal student loan borrowers have exited the defunct SAVE repayment plan in recent weeks, but millions remain at risk as deadlines approach. Nicholas Kent, a top official at the U...

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However, Republican-led legal challenges halted the program, and a federal appeals court ended it earlier this year.\nThe Trump administration is now transitioning borrowers out of SAVE. Borrowers are expected to receive notices from loan servicers starting around July 1 and will generally have about 90 days to choose a new repayment plan.\nKent said deadlines may vary throughout the summer to avoid overwhelming loan servicers.\nBorrowers who fail to choose a new plan could be automatically moved into the Standard Repayment Plan or the Tiered Standard Repayment Plan, both of which may carry significantly higher fixed monthly payments.\nThat may create another bottleneck. More than 530,000 borrowers were already waiting for repayment-plan applications to be processed as of late April.\nHigher education expert Mark Kantrowitz warned that borrowers who remain in SAVE will continue to accumulate interest while making no progress toward loan forgiveness.\nHe estimates the typical SAVE borrower has about $57,000 in debt at a 6.7% interest rate, meaning balances may have already grown by more than $2,500 since interest resumed last year.\nBorrowers transitioning out of SAVE may soon face an even tougher repayment landscape.\nUnder President Donald Trump's One Big Beautiful Bill Act, borrowers who take out new federal loans or consolidate existing debt after July 1 could lose access to several flexible repayment and loan-forgiveness options.\nMark Kantrowitz warned that borrowers who fail to adjust to higher payments under standard repayment plans could eventually fall into delinquency and default, increasing the risk of wage garnishment and credit damage.\nDisclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.\nImage via Shutterstock\nTo add Benzinga News as your preferred source on Google, click here.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.43.1","shortVersion":"4.43.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2642726823","isCrawlerRequest":true}