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Millions of student loan borrowers enrolled in the Saving on a Valuable Education (SAVE) repayment plan remain in administrative forbearance, with no clear timeline for what happens next. On Feb. 27, a federal judge rejected a proposed settlement that would have ended SAVE ahead of its planned July 2028 phase-out under the One Big Beautiful Bill Act (OBBBA).
In 2024, parts of the SAVE income-driven repayment (IDR) plan were blocked, when several states sued over the legality of the plan. Those lawsuits argued that some SAVE provisions exceeded the Secretary of Education’s authority, and borrowers enrolled in SAVE were placed in involuntary administrative forbearance. When the Education Department (ED) announced a proposed settlement agreement in December, it seemed clarity about the end of SAVE was near, but that changed when a federal court unexpectedly dismissed the legal case.
According to Judge John Ross of the U.S. District Court for the Eastern District of Missouri, there was no case for the court to decide, because the agreement indicated there was no longer a dispute between the parties. Also, legislation was already passed to end SAVE. That means SAVE remains legally available to borrowers until at least July 2028, unless additional legal actions end it sooner.
What this means for borrowers enrolled in SAVE
The SAVE lawsuit and ensuing administrative forbearance triggered several changes for borrowers. So far, these changes remain in place:
- Borrowers enrolled in SAVE haven’t been required to make payments since the forbearance began.
- Borrowers in SAVE forbearance haven’t been earning credit toward IDR forgiveness or Public Service Loan Forgiveness (PSLF).
- Interest accrual started again in Aug. 2025 for SAVE-enrolled loans following a period of forbearance as the lawsuit progressed.
- The ED stopped enrolling anyone in the SAVE plan.
Because the court basically stepped aside without declaring SAVE lawful or unlawful, it isn’t clear whether the ED is legally required to end forbearance, restart payments, resume enrollments and reinstate credit toward forgiveness. And, the ED has not made any statements indicating it will do so.
Further, the SAVE quandary could continue if additional lawsuits are filed, or the ED initiates what could be a lengthy rulemaking process to remove SAVE from federal regulations before 2028.
🤓 Nerdy Tip
Check that your contact information is up to date in both your studentaid.gov and federal student loan servicer accounts. This will help you stay informed of SAVE updates that may impact your repayment. The ED is also posting updates on this studentaid.gov page, although it hasn't yet addressed the Feburary 27 court decision or provided next steps. Possible actions for SAVE borrowers now
While waiting for more information about SAVE, here are four possible actions to take.
1. Switch to a different repayment plan
Because you haven't been earning credit toward PSLF and IDR forgiveness while in SAVE forbearance, and it isn't clear when you will, you could go ahead and switch to a different IDR plan to restart payments and earn forgiveness credit again. IDR plans currently available are Income-Based Repayment (IBR), Pay as You Earn (PAYE) and Income-Contingent Repayment (ICR). Here are a few things to know:
- IBR previously had a requirement of partial financial hardship, but that no longer applies, which may open IBR to a broader range of incomes. The partial financial hardship requirement has also been removed from the IDR application.
- The PAYE and ICR repayment plans reopened late last year, following a period of being closed. However, the ICR and PAYE plans will be eliminated by July 1, 2028.
- If you switch to IBR, PAYE or ICR for loans you have now (disbursed before July 1, 2026) and don’t take out additional loans, you can remain on these plans as long as they’re available.
- If you take out new student loans after July 1, 2026, you will no longer have access to IBR, PAYE or ICR, even for loans already enrolled in them. That’s because all federal Direct Loans must be repaid under the same repayment plan.
- The only repayment plans available after July 1, 2026, will be the new Repayment Assistance Plan (RAP) and a new, tiered standard repayment plan. RAP will be the only income-based plan and will require 30 years worth of payments before loan forgiveness.
Loan servicers are processing new applications for IBR, PAYE and ICR plans, though expect possible delays — as applications have been stuck in a backlog. It may help to speed up the process, if you apply electronically and link to your IRS tax return, instead of uploading documents like pay stubs.
Use the ED's loan simulator to estimate what your payments and forgiveness timeline might look like on different IDR plans. And consider the decision to switch plans carefully, because your monthly payments could increase.
🤓 Nerdy Tip
You aren’t required to consolidate your loans to change from SAVE to another eligible income-driven plan.
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2. “Buyback” forgiveness credit, if you’re eligible for PSLF
There has been no indication from the ED that all SAVE borrowers will retroactively and automatically receive IDR or PSLF forgiveness credit for the months they have spent in administrative forbearance. But some PSLF borrowers have been able to "buy back" months of PSLF credit for time spent in SAVE forbearance. You may qualify for the PSLF buyback if each of these apply:
- You have an outstanding federal student loan balance.
- You have approved qualifying employment for 10 years of public service. (Use the government's PSLF Help Tool to confirm you’ve reported all periods of public service employment.)
- You qualify for forgiveness when the months in forbearance are included.
- Buying back these months will complete your total of 120 qualifying PSLF payments needed for forgiveness.
To get credit, you must submit a buyback request and make an extra payment of at least what you would have owed under an IDR plan during the month(s) you want to buy back. Be aware that a backlog of PSLF Buyback applications has recently caused some delays in processing.
More information is available on studentaid.gov.
SAVE and forgiveness delays
Borrowers who qualify for forgiveness while still enrolled in SAVE must switch to another income-driven repayment plan before their loans can be discharged. Because of processing backlogs for IDR applications, some borrowers have experienced delays when moving from SAVE to another plan. Also, after moving to a new plan, borrowers could face further delays in forgiveness processing. Borrowers should continue to make and keep track of required payments (or ask for forbearance), until forgiveness is granted and the loan balance is officially discharged.
3. Make voluntary or interest-only payments
Even though forbearance means you aren't required to make payments, you could still benefit from making them.
Following a pause, interest began accruing again for loans in SAVE forbearance in August 2025. If you remain on the SAVE plan until it ends, making interest-only payments can keep your student debt from ballooning further, reducing what you owe when the forbearance ends.
Despite being in forbearance, you could also go ahead and pay your monthly payment amount to continue reducing what you owe. However, that may not be a good idea if you’re pursuing a student loan forgiveness path, like PSLF. That’s because any payments you make don't currently count toward forgiveness.
Nerdy Perspective
My husband has law school student loans that are on the SAVE plan. We are in this weird limbo with many other borrowers. We have an idea what plan we’ll move to, but it’s unclear if it’s worth staying in SAVE until we’re required to change or if we should move now. In the meantime, we've decided to go ahead and pay a little under $1,000 per month in interest, which is less than what his payment would be on any of the repayment options available to him.
Student Loans Editor
4. Do nothing and wait it out
Given the chaos surrounding the federal student loan system right now, and the lack of ED guidance about SAVE, you could choose to do nothing until you have clearer direction.
Make the most of this time to research IDR plans, determine your eligibility and be ready to move to a new plan if and when you're required to.
Until the forbearance ends, take advantage of the payment reprieve to work on other financial goals, like paying down credit card debt or building an emergency fund.
But be aware of some downsides to waiting:
- Right now, you aren’t earning credit toward IDR or PSLF forgiveness while you remain on SAVE.
- At the same time, you’re accruing interest and increasing your overall debt.
- If the ED issues a deadline for you to switch to a new IDR plan and you miss it, you could be automatically placed into one that may not align with your budget and forgiveness goals.
Getting more information about SAVE changes
Keeping track of student loan changes resulting from the OBBBA has been difficult. Even loan servicers can't answer some questions about SAVE, because the ED hasn't provided them yet. Your best approach is to stay alert for communication from the ED and your loan servicer about SAVE next steps.
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