The Eighth Circuit Court of Appeals on Monday ended a legal challenge to the SAVE student loan repayment program and directed a district court to approve a proposed settlement between the Trump administration and the state of Missouri to end the program.
With this judgment, the SAVE program will be permanently eliminated. The program, created during the Biden administration, offers borrowers the lowest monthly payments of any federal student loan repayment option.
While the legal battle continues, more than 7 million people who have been on SAVE for a year and a half will soon need to transition to other repayment options. The Department of Education is expected to provide further guidance in the coming weeks.
The SAVE program is an income-driven student loan repayment program launched by the Biden administration in 2023 to make borrowers’ payments more manageable by reducing monthly payments based on income and family size. It also aims to prevent loan interest rates from skyrocketing for borrowers with lower monthly payments and to provide quick loan relief to certain low-income borrowers.
According to the Department of Education, more than 7 million borrowers are currently enrolled in the SAVE program, and 450,000 borrowers who have expressed interest in joining the program will also be affected by the agreement.
With SAVE coming to an end, all of these borrowers will need to apply for alternative repayment plans.
“The end of the SAVE program removes the most affordable repayment plan option for today’s borrowers, and many will feel the financial impact immediately,” said Kaydee Ambas, consumer finance professional at Earnest.
“While Congress has set the SAVE program to sunset in 2028, borrowers were counting on a few more years of predictable, more affordable payments before any transition. Now they face an accelerated transition with far less time to prepare,” she added.
Read more: How IDR Student Loan Forgiveness Works
The elimination of the SAVE program may prompt future borrowers to reconsider whether federal student loans are right for them. When it comes to repayment options, it’s important to consider how Trump’s “One Big Beauty Act” has changed the federal student loan landscape and eliminated some of the benefits that made federal loans so attractive.
According to OBBB, starting in July 2026, new federal loan borrowers will have only two repayment plans to choose from: the standard repayment plan and the new repayment assistance plan.
A standard repayment plan will allow student loan borrowers to make regular payments over 10 to 25 years. The repayment assistance program will allow borrowers to pay 1% to 10% of their income each month for up to 30 years.
Private student loan lenders offer fewer repayment options because you can typically only choose terms between 5 and 15 years, and these programs don’t take your income into consideration.
When weighing federal loans versus private loans, you’ll want to consider several factors in addition to your repayment plan to determine which type of loan is best for you. This includes borrowing limits, interest rates, credit score requirements, grace periods, and deferment and forbearance options.
Read more: Are federal student loans still the gold standard after Trump budget bill?
Millions of borrowers are now at the mercy of the government’s next move and must quickly change tactics and create new student loan repayment plans, but experts say there are still viable options.
“Start by logging into their servicer account to review their options, use the federal loan simulator to compare different IDR programs and submit an application for your preferred program before the system is overwhelmed,” Ambas said. “The upcoming repayment assistance programs will not replicate the affordability of SAVE, so it’s important to prepare early.”
Borrowers with more stable incomes and good credit scores may consider refinancing their loans with a private lender for better terms. However, before exploring this option, it’s important to note that refinancing your student loans means you’ll lose the protections that come with federal student loans, such as Public Service Loan Forgiveness (PSLF) and income-driven repayment plans.
“The key is to actively evaluate your options now rather than waiting to see what happens,” Ambas said.
Read more: What will happen to student loan repayments after Trump’s budget bill?
No matter what happens next, you can still take steps to reduce your student loan balance.
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Pay more than the minimum: Making a monthly loan payment that exceeds the minimum payment can reduce the amount of interest you pay over the life of the loan and shorten the time it takes to repay it.
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Set up automatic payments: Setting your loan up for autopay means you’ll never miss a payment or risk incurring additional fees or damaging your credit score.
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Refinance federal loans if it makes sense: Shop around to see if refinancing your student loans can help you save money. Borrowers with higher credit scores may be able to get better interest rates from private lenders, saving money on interest over time and shortening their repayment terms. Of course, this does mean losing some federal protections, but if you don’t need to rely on income-based repayment plans, deferment and forbearance plans, and don’t qualify for PSLF, it may make sense for your situation.
Read more: Tips and tricks to pay off your student loans quickly
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