The payment pause that protected borrowers in the SAVE scheme is ending, with loan service providers set to start notifying borrowers to move to a new repayment plan from July 1.
Once the borrower receives that notice, the clock starts: Forbearance ends 90 days after the official notice is sent, meaning the most affected borrowers will have until the end of September 2026 to return to active repayments. This means that either the borrower selects a new repayment plan, or will default back to the standard repayment plan.
The bottom line – almost all of these borrowers will be due in October or November, whether they choose to defer repayment payments or not.
why it matters: Roughly 7.7 million borrowers were enrolled in the SAVE plan when it was struck down in court, and there are still about 7 million borrowers waiting for the related forbearance.
Borrowers have time from now until the expiry of the notice to select a new repayment plan. Enrolling in the new repayment plan starts payments immediately. However, failing to select a repayment plan will result in the borrower defaulting to the standard plan – payments will resume anyway.
Borrowers who don’t take action risk defaults, damaged credit, and ultimately default.
timeline
Here’s the expected timeline for the end of the SAVE plan’s forbearance and enrolling in a new repayment plan or defaulting to the standard plan.
- 1 July 2026: Loan service providers have started sending notices to borrowers instructing them to choose a new repayment plan. Entering a repayment will also exhaust the forbearance.
- 90 days after notice:Forbearance ends for borrowers who have not chosen a new repayment plan. Borrowers who fail to opt in will default to the Tier Standard plan.
- end of september 2026: Contact date for borrowers in early July.
A borrower who does not receive a notice by mid-July may technically receive a notice by mid-October. But sources tell us the notification period will be “compressed,” meaning most borrowers should plan around the late September deadline rather than relying on extra weeks (or months).
What happens if you do nothing: Borrowers who do not choose a new plan before the end of the moratorium period will be transferred to the standard repayment plan by default. That plan generally has the highest monthly payments among all the repayment plans.
Missed payments will be reported after the standard 90-day delinquency period has passed, and federal student loans will enter default after 270 days of nonpayment. The default triggers treasury offsets and collection charges for payroll deductions, tax refunds, and Social Security.
Update your contact information now: The most important step right now is to make sure that your loan servicer can actually reach you. Borrowers should:
- enter into studentaid.gov And confirm the email address, mailing address, and phone number on file.
- Log in directly to your loan servicer (Mohela, Nelnet, AdFinancial, etc.) and update the contact information there as well. Sometimes the information from StudentAid and your loan servicer differs.
- Set up email and text alerts so no notices are buried.
Borrowers who moved location, changed their email address, or changed their service provider in the last two years are at the highest risk of missing notices entirely.
What To Do Next: Replacement options for SAVE borrowers include the Income-Based Repayment (IBR) plan, the new Repayment Assistance Plan (RAP) when available in July, and standard plans. While both Pay As You Earn (PAY) and Income Contingent Repayment (ICR) still technically exist, they are expiring in less than 2 years and may not be as good an option for most borrowers. Each has a different payment calculation and forgiveness timeline.
How it connects: College Investor has tracked the SAVE scheme since its implementation, including the court decision halting the program and the launch of the Repayment Assistance Scheme.
With more than 42 million Americans carrying federal student loan debt and the average student loan balance exceeding $38,000, the end of SAVE forbearance is one of the largest single events of the decade.
Borrowers who have not logged in to StudentAid.gov or their servers in the past six months should do so this week – before the July notices hit inboxes.
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