Education Department tells 7.5 million SAVE borrowers to prepare for repayment

March 27, 2026 / 11:39 PM EDT / CBS/AP
More than 7 million student loan borrowers who have been enrolled in a Biden-era repayment plan will receive notices beginning Friday with instructions to seek a new plan to repay their debt, the Education Department said.

The available repayment plans will mean higher monthly payments for most of those borrowers.

The Education Department called the plan "illegal," and said in a statement Friday it's based on "the false promise of student loan forgiveness and artificially low monthly payments."
When Alexis Arredondo graduated from the University of California, Los Angeles, in 2024 with a degree in microbiology, he struggled to find full-time work in research or public health.

Instead, he began working part-time and freelancing for nonprofits in Southern California.

"It's very difficult knowing where I'm going to be to able to get this money from," he told The Associated Press.

"Over and over again, education officials of both parties made promises about fixing the broken student loan system and called student debt a crisis," he told The Associated Press.

"And yet today, these same borrowers are being told it's time to pay and you have no good options."
Starting July 1, the Education Department said that a new income-driven repayment plan called the Repayment Assistance Plan will be an option for borrowers.

The plan ties monthly payments based on a borrower's income and number of dependents with fixed terms and timelines between 10 and 25 years to repay.

Last year, the Trump administration and Congress made several changes to student loan repayment options that will take effect over the next two years.

For one, new student loans will no longer have the option of deferment because of unemployment or economic hardship.

"You're talking about a pressing current affordability crisis, and you took away the most affordable plan option," said Alexander Lundrigan, policy and advocacy manager at Young Invincibles, an advocacy group.