Navigating the Uncertainties: A Guide to Student Loan Options Amidst Blocked SAVE Plan

The landscape of federal student loan repayment has been remarkably turbulent, marked by legal challenges, policy shifts, and administrative complexities. For borrowers, this has translated into a period of uncertainty and confusion, particularly concerning income-driven repayment (IDR) plans and loan forgiveness programs. This article aims to provide clarity on the current state of affairs, focusing on the blocked Saving on a Valuable Education (SAVE) Plan and alternative options available to borrowers.

The Dizzying Reality of Student Loans

Student loan borrowers have experienced a remarkably dizzying year, with significant changes involving IDR plans. The SAVE Plan, unveiled by the Biden Administration in 2023, aimed to be the most generous IDR plan, featuring a high-income threshold and subsidies to account for ballooning interest payments.

However, a federal court temporarily blocked the SAVE plan, leaving millions of enrolled borrowers in a lurch. Although ED at first placed SAVE borrowers in an administrative forbearance that was interest-free, ED started charging interest again on those loans last August. Just this week, ED and the states challenging SAVE reached a settlement that would end the SAVE plan permanently, and with it, end the limbo that the millions of SAVE borrowers have been in.

The SAVE Plan Blocked: What Happened?

In April 2024, the State of Missouri and several other states sued the ED over the legality of the SAVE plan, arguing that some SAVE provisions exceeded the Secretary of Education’s authority. As a result, borrowers enrolled in SAVE were placed in involuntary administrative forbearance. Since the forbearance began borrowers enrolled in SAVE haven’t been required to make payments. It’s still uncertain when payments will resume.

The 8th Circuit Court of Appeals sided with the Republican-led states that filed suit against former President Biden’s administration. Notably, the ruling also directed the lower court to strengthen the injunction, stating that the block on the SAVE plan should be broader. The case will now return to the Eastern Missouri lower district court, which is tasked with issuing a final ruling on the fate of the SAVE plan.

Read also: Age-Based College Savings Guide

Understanding the SAVE Plan Forbearance

Borrowers enrolled in the SAVE plan have been placed in a forbearance, meaning borrowers in SAVE are not currently required to make payments. However, this forbearance has consequences:

Interest Accrual: Interest accrual started again in August 2025 for SAVE-enrolled loans following a period of forbearance as the lawsuit progressed.
No Progress Towards Forgiveness: The months they spend without making payments don’t count toward the 120 qualifying payments for PSLF or the 20 to 25 years necessary for IDR forgiveness.

Navigating the End of SAVE: Options for Borrowers

With the SAVE plan's future uncertain, borrowers need to understand their options and take proactive steps. Here are some possible actions for SAVE borrowers now:

Switch to a Different Repayment Plan:
Because you aren’t earning credit toward PSLF and IDR forgiveness while in SAVE forbearance, 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).
- 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 - more than 700,000 IDR applications were stuck in a backlog, as of December 2025. 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. You aren’t required to consolidate your loans to change from SAVE to another eligible income-driven plan.

Read also: Mastering Autosaves in Dynasty Mode
"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 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. 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.
Make Voluntary or Interest-Only Payments

Read also: Essential Tips: Saving Money as a Student

You may not have much time left in the SAVE plan, but you could still benefit from making payments. 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 won’t count toward forgiveness.
Do Nothing and Wait It Out
Given the chaos surrounding the federal student loan system right now, and the lack of guidance about transitioning from SAVE, you could choose to do nothing until the government provides more direction. Make the most of this time to research IDR plans, determine your eligibility and be ready to move quickly during what the ED has said will be a “limited time” to switch plans. But be aware of some downsides to waiting:
- 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 you miss the deadline to switch or don’t choose a new IDR plan yourself, the ED is likely to automatically place you into one, and it may not align with your budget and forgiveness goals.

Other Loan Forgiveness and Discharge Options:

Beyond IDR plans and PSLF, several other avenues exist for student loan forgiveness or discharge:

Teacher Loan Forgiveness: You may be eligible for forgiveness of up to $17,500 if you teach full time for five complete and consecutive academic years in certain elementary or secondary schools or educational service agencies that serve low-income families, and if you meet other qualifications.
Total and Permanent Disability (TPD) Discharge: To get TPD discharge, you must have a disability that severely limits your ability to work, now and in the future. In most cases, you’ll have to provide specific kinds of proof of your disability and may be subject to a post-discharge monitoring period which could reinstate your discharged loans. But some people get an automatic discharge if they are identified as eligible by the Social Security Administration or Veterans Affairs.
Borrower Defense to Repayment: Borrower defense to repayment is a legal ground for discharging federal Direct Loans. Borrowers apply for borrower defense for specific reasons that are outlined more thoroughly here.
Closed School Discharge: Another form of school-related discharge is closed school discharge.
Military Service Benefits: The U.S Department of Education and Department of Defense have special benefits for military service members with federal student loans.
Segal AmeriCorps Education Award: The Segal AmeriCorps Education Award is a benefit received by participants who complete a term of national service in an approved AmeriCorps program-AmeriCorps VISTA, AmeriCorps NCCC, or AmeriCorps State and National.

The One Big Beautiful Bill Act (OBBBA): A Transformative Law

The One Big Beautiful Bill Act (OBBBA), enacted by Congress through budget reconciliation, has made significant changes to the student loan landscape. First, the law eliminates three existing IDR plans and replaces them with just two plans: the Income-Based Repayment (IBR) Plan and a new but, for most, more expensive plan, the Repayment Assistance Plan (RAP). The OBBBA is also replacing the current Standard repayment plan with a new, tiered Standard plan. Borrowers with no new loans before July 1, 2026, will be able to access all the old IDR plans and old Standard plan through June 2028. At that point, they will have to choose between the new Standard plan, RAP, and IBR, whereas a new borrower or old borrower who consolidates on or after July 1, 2026, will only have access to the new Standard plan and RAP.

Thanks to the OBBBA, borrowing to pay for higher education is likely going to get much more expensive-at a time when increasing household expenses are stretching already tight American budgets. Apart from the changes to IBR, the OBBBA also placed new borrowing caps on federal student loans that students can obtain, and it altogether eliminated the federal Grad PLUS loan program for incoming graduate students.

PSLF Changes and Considerations

2026 will also likely see more uncertainty for PSLF and public service workers. Created by Congress in 2007, PSLF allows public service workers like nurses, teachers, social workers, and first responders to have the remainder of their student loans cancelled after 10 years of working for a government or nonprofit 501(c)(3) employer. Earlier this year, the Trump Administration issued a regulation that would harness PSLF to further its radical agenda. If the rule goes into effect on July 1, 2026, as scheduled, it would allow ED to unilaterally disqualify employers from PSLF eligibility for 10 years if they engage in so-called “illegal” activities that it doesn’t like: advocating for immigrants, supporting gender-affirming care for minors, promoting diversity, and engaging in peaceful protest.

Additional Challenges and Resources

The turmoil borrowers are enduring is occurring amid truly unparalleled chaos in the entire federal government, including those agencies that administer the student loan program and provide guardrails against fraud and abuse in the system. In particular, the Trump Administration has taken a wrecking ball to ED, which administers the federal student loan system, and the Consumer Financial Protection Bureau, which oversees private student lenders and student loan servicers like MOHELA and operates a consumer complaint database to help informally resolve disputes.

Key Takeaways and Advice for Borrowers

Stay Informed: Keeping track of student loan changes resulting from the One Big Beautiful Bill Act 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 the end of SAVE. You should be receiving timelines and next steps, likely in the first half of this year after settlement approval. At that point, the timeframe to switch from SAVE to another plan may be short, so you won’t want to miss important deadlines.
Update Contact Information: 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 key SAVE updates that may impact your repayment. The ED is also posting updates on this studentaid.gov page.
Explore Alternative IDR Plans: Given the news about the SAVE Plan, many borrowers might have concerns about other income-driven repayment options. Department of Education has reopened applications for certain IDR plans, including IBR, PAYE, and ICR, as of March 26, 2025.
Consider Consolidation Carefully: If you’re planning to consolidate your loans, be sure to submit the application months before the July 1, 2026, cutoff date to ensure you maintain access to the IDR plans through June 2028.

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