As student loan borrowers across America switch off of the more affordable Saving on a Valuable Education (SAVE) repayment plan and prepare to choose a new repayment plan, they’re seeing rising monthly payments.
That’s because on July 1, borrowers on the SAVE repayment plan began receiving notice that the program is no longer available. On that same date, other student loan repayment plans ended for new borrowers and the new Repayment Assistance Plan (RAP) launched.
I spoke with two former SAVE borrowers and a student loan researcher about what borrowers can expect when it comes to their payments.
My editor’s spouse, Frank Myhre-Nunes, is one of the millions of borrowers who were told this summer they had to switch off the SAVE plan. He had about $220,000 in student loan debt from undergraduate and law school. He said in an email that he chose the SAVE repayment plan because it was affordable and allowed him to work toward Public Service Loan Forgiveness (PSLF). His loans were put in forbearance due to a long legal battle over SAVE.
Since the Department of Education (ED) started charging interest again on the SAVE loans in forbearance, the interest on Mhyre-Nunes’ student loan has gone up by over $10,000, and he now owes $230,000. This potentially lengthens the time it will take him to repay his student loans. He said that while his new monthly payment starts out lower than it was before he was forced into forbearance, his payment will increase over time.
Myhre-Nunes said communications from the ED haven’t been helpful, and he’s worried about whether he’ll still be eligible for student loan forgiveness under his new repayment plan.
“The handling of the new payment plans has been horrible,” he said.
“The handling of the new payment plans has been horrible,” he said.
When he first went to his loan servicer Nelnet, he said he was directed to the DOE’s website. He found a plan he thought was best for him, and it required filling out an approximately six-page form to send to his loan provider.
“The questions were super confusing and, to be honest, overwhelming because I didn't want to fill out the wrong information and have my application denied,” Mhyre-Nunes said.
Many borrowers who were on the SAVE plan find themselves in a similar boat, according to the Student Debt Crisis Center. However, there are steps you can take to manage your potentially higher payments going forward.
Uncertain payment terms and messaging
With the passage of President Donald Trump’s One Big Beautiful Bill Act, changes were made to the structure of federal student loans, and they took effect July 1. For any borrower who takes out a new loan from here on, they will only be able to enroll in RAP or the new Tiered Standard repayment plans. The Tiered Standard plan is a fixed-payment federal plan that has you repay your loans over 10 to 25 years depending on how much was borrowed.
The structure of these plans can lead to higher payments for some borrowers, but shorter loan terms. Most of these plans would cost more than what many borrowers were paying on SAVE, due to the nature of SAVE being designed to be more affordable for working Americans.
SAVE borrowers who were notified to change plans but do not do so within 90 days will be automatically enrolled in the Standard or Tiered Standard repayment plan, which may not be the best scenario for your budget.
Daniel Collier, an associate professor of higher and adult education at the University of Memphis, and a fellow with the Debt Collection Lab at Princeton University, says that increased student loan payments and uncertain payment amounts can have impacts on financial and personal milestones. For example, he said borrowers may delay buying a home or becoming a parent until they are more certain about their repayment plan and its cost.
Many borrowers have found themselves struggling to trust messaging on student loans from the federal government, Collier says. The Trump administration’s dismantling of the ED, the back and forth on the legality of SAVE, and mixed messaging on available student loan repayment plans have all led to an erosion in borrowers’ confidence.
“Uncertainty in this system is driving mistrust of the system. And together these concepts are hindering people’s mental states,” he says.
Collier says that from his research on borrowers and related interviews with borrowers, they feel like they are not receiving clear or correct information regarding student loan repayment. This uncertainty is delaying borrowers’ ability to plan financial decisions.
But it’s not just changes and uncertainty with student loan repayment that’s affecting borrowers’ mental states. Collier notes that higher prices in recent years from inflation have put a strain on some people’s budgets, making everything more expensive.
“A lot of these financial factors are very strongly correlated with the increased cost of everything else,” he says. “Yes, the student loans by themselves wouldn’t necessarily be as harmful as they are now in a context where everything else became more expensive.”
What to do about your higher payment
If you cannot pay your student loan bill, you can reach out to your loan servicer about loan deferment or forbearance. These options allow you to temporarily suspend your payments if you meet certain eligibility requirements, and they can buy you time to figure out your budget.
Interest accrues on all federal student loans during forbearance. In deferment, you are not responsible for the interest that accrues on subsidized loans, but you are responsible for the interest that accrues on unsubsidized and PLUS loans. And if you’re pursuing PSLF, you stop making progress toward student loan forgiveness until you resume payments after forbearance or deferment.
In the meantime, before your payments resume, you may need to reevaluate your budget or income sources if you can’t afford your current student loan payment. Understanding the difference between your fixed costs (things like housing, transportation, groceries and utilities) versus flexible spending can help you identify expenses you may be able to reduce temporarily, freeing up money to stay current on your student loan payments while you explore longer-term solutions.
If you’re coming out of forbearance or know you will be switching to a different repayment plan with higher payments, my colleague Amanda Barroso, NerdWallet’s senior credit expert, suggests the following steps:
- Start prepping your budget now. Use a student loan repayment estimator so you know exactly what to expect, instead of waiting for the notice to arrive.
- Pull out your monthly budget (if you don’t have one, there are simple ways to get started) and start cutting unneeded subscriptions and expenses (think dining out, convenience purchases and other “wants”) to make room for your new payment amount. You want to find the places you can cut to create room now, instead of when you’re stressed and your payment deadline is looming.
- Start a practice run on your repayment by taking the estimated new payment and setting it aside — ideally in a high-yield savings account — to stress-test your budget and start building a buffer.
How to lower your student loan payment
If you’re looking to lower your student loan payment, you can consider the following options:
- Reach out to your student loan servicer for student loan help.
- Consider other repayment options that might have lower monthly payments using the Education Department’s Loan Simulator.
- Sign up for autopay to get a discount on your rate.
- Refinance your loans — but only if it means a lower rate or shorter and affordable term.
Kelsey Sheehy, a senior writer and NerdWallet authority on small business, was on the SAVE plan for her undergraduate and graduate school loans. She is planning to switch to the Income-Based Repayment (IBR) plan for income-driven forgiveness purposes, and anticipates her monthly payment will go up by more than $1,400: from $452.10 on SAVE prior to forbearance to $1,885 with IBR.
While Sheehy could have a lower monthly payment on the standard plan, she then wouldn’t pay off her loans until 2048 — resulting in paying more than three times what she originally borrowed.
In August 2025, when interest on her loans started accruing, she considered switching from the SAVE plan. However, she had just had her second child. “Avoiding two major financial hits at once was the right decision for me. But not knowing when payments will actually resume makes it hard to plan for what's next,” she says.
Sheehy says she isn’t certain exactly when she will have to switch plans. “Communication from the Education Department makes it seem like I need to switch plans immediately,” she says. “There’s no timeline, just urgency.”
While worried about the upcoming increase in her monthly payments, Sheehy has a plan: “I’ll pull back on most of my personal spending. My student loans are mine. I don’t want them to impact my family.”
