What effects will the termination of the SAVE Plan have?
By Easton Martin | December 10, 2025
The Trump administration’s decision to terminate the SAVE Plan, a key income-driven repayment program introduced under the prior administration, is now having immediate effects on millions of borrowers.
On December 9, the Department of Education announced a settlement with several states that ends the SAVE program. Under this agreement, new enrollments are no longer being accepted, pending applications are being denied, and the roughly seven million borrowers currently enrolled must transition into other repayment plans.
For borrowers, this change has serious financial implications. Payments that had been paused or reduced under SAVE are ending, and interest, which was temporarily suspended while SAVE was under legal challenge, has restarted. Many borrowers who relied on low or zero-dollar monthly payments are facing higher bills and rapidly accruing interest.
The administration is also implementing a broader overhaul of income-driven repayment plans. Many older plans, including SAVE, will be phased out and replaced with a smaller number of repayment options. The new Repayment Assistance Plan offers payments based on a percentage of income, but balances are only forgiven after thirty years. In addition, new borrowing caps for graduate and professional students have been imposed, limiting how much can be borrowed annually and over the lifetime of a student’s career.
