By SPEAKIN’ OUT NEWS
Millions of Americans with federal student loans are facing major repayment changes after the U.S. Department of Education began notifying borrowers enrolled in the Saving on a Valuable Education (SAVE) plan that they must select a new repayment option within 90 days.
The notices, which began going out July 15, affect borrowers whose loans have remained in administrative forbearance while the SAVE program has been tied up in federal court. According to the Education Department, borrowers who do not choose a new repayment plan before their individual deadlines will automatically be placed into the Tiered Standard Repayment Plan, which could result in significantly higher monthly payments depending on income and loan balances.
Borrowers may instead apply for other federally authorized repayment options, including the long-standing Income-Based Repayment (IBR) program.
The changes come as the Trump administration continues dismantling the SAVE plan, which was introduced during the Biden administration to reduce monthly payments by tying them to a borrower’s discretionary income. In many cases, eligible borrowers qualified for monthly payments of $0.
At the same time, the administration has proposed new “return on investment” standards for higher education programs receiving federal student aid. Under the proposal, degree programs whose graduates fail to meet certain earnings benchmarks could lose access to federal financial aid.
Critics argue the policy could disproportionately affect lower-paying but essential professions such as teaching, social work, nursing, and the arts, particularly at regional colleges, HBCUs, and other minority-serving institutions.
Education officials encourage borrowers to review all available repayment options through the Federal Student Aid website before their deadlines, since repayment plans differ in monthly costs, interest charges, and eligibility for future loan forgiveness.