Overview

• A federal court injunction declared the SAVE plan illegal and prompted the Department of Education to halt all new SAVE applications.
• Nearly 7.7 million borrowers currently in SAVE forbearance will begin accruing interest again on August 1 when the interest-free pause expires.
• Education Secretary Linda McMahon advised enrollees to switch to the Income-Based Repayment plan, which charges 10–15% of discretionary income and may more than double monthly payments.
• About 460,000 borrowers who applied for SAVE’s lower payment structure have been denied access and must enroll in alternative income-driven plans.
• Congressional Republicans’ new legislation sets a Repayment Assistance Plan to launch by July 1, 2026, offering another income-tied option though potential savings versus IBR remain unclear.