Nearly eight million federal student loan borrowers are entering their second year of paused payments. And confusion reigns over how much longer the reprieve will last.
Since August of last year, borrowers who had enrolled in the SAVE plan have been subject to an involuntary forbearance. The SAVE plan was launched by the Biden-Harris administration in 2023 and was touted as the most affordable income-driven repayment option, with lower monthly payments and multiple tracks to eventual student loan forgiveness. But a group of Republican-led states filed a legal challenge. The program has remained in legal limbo since since last summer, when the Eighth Circuit Court of Appeals issued an injunction blocking the Department of Education from implementing the program.
Millions of borrowers have since been stuck in a forced administrative forbearance that has paused payments (and, until last month, interest accrual, as well) but has also blocked further progress toward student loan forgiveness. The GOP legal challenge is technically ongoing. At the same time, President Trump signed legislation passed in July by congressional Republicans that will repeal the SAVE plan, but not immediately. Amid all of this upheaval, the future of the SAVE plan forbearance is subject to significant uncertainty.
When will SAVE plan borrowers have to restart making payments on their student loans again? Here’s what we know.
SAVE Plan Forbearance Pauses Student Loan Payments Even As Interest Resumes
Since August of last year, around eight million federal student loan borrowers enrolled in SAVE have been in a forbearance due to the Eight Circuit’s injunction. During the forbearance, no payments have been required, and no interest should have been accruing.
In July of this year, the Trump administration announced that the Department of Education would resume charging interest for SAVE plan borrowers starting on August 1. The administration argued that this was necessary in order to comply with subsequent court rulings in the ongoing legal challenge, but critics disputed this, noting that no court has ordered the department to resume student loan interest for SAVE plan borrowers.
“Borrowers with loans in the SAVE forbearance will see those loans begin accruing interest on Aug. 1, 2025,” said the department in updated web guidance on the SAVE plan legal challenges.
But although interest is now accruing on these student loans, that does not mean payments are due. And while some student loan servicers have specific future return-to-repayment dates noted in borrower accounts, these dates are likely just placeholders. There is no firm end-date for the SAVE plan forbearance at this time.
“This forbearance will last until the legal situation changes or servicers are able to send bills to borrowers at the appropriate monthly amount,” say the department in its updated guidance.
Student Loan Payments For SAVE Plan Borrowers To Resume In 2028 At The Latest
Under the provisions of the so-called “One, Big, Beautiful Bill” that President Trump signed into law in July, the SAVE plan will be repealed by July 1, 2028. At that time, borrowers who want to continue making payments on their student loans based on their income will have to switch to either Income-Based Repayment (or IBR), or the new Repayment Assistance Plan (or RAP). Borrowers who take out new federal student loans or consolidate their existing loans on or after July 1, 2026 would be limited to RAP only.
This means that the longest the forbearance would last would be to July of 2028, which is when the SAVE plan must legally be sunsetted under the provisions of the “Big, Beautiful Bill.” But that doesn’t necessarily mean that the forbearance will actually last that long. Furthermore, now that interest is accruing again, borrowers who choose to remain in the forbearance will see their balances increase over time, while the months will continue to not count toward student loan forgiveness under IDR plans or PSLF, the Public Service Loan Forgiveness program. As a result, the Department of Education is encouraging borrowers in the SAVE plan forbearance to switch to a different IDR plan, particularly those who are pursuing PSLF.
“Borrowers can apply to enroll in a different PSLF-eligible repayment plan,” says Department of Education guidance. “We encourage borrowers to look at the specific terms of each plan to make the best choice for their individual situation. Different IDR plans may require different monthly payments, and—in the case of the IBR Plan—borrowers who later enroll in a different repayment plan may face interest capitalization (where unpaid interest is added to the principal balance). However, payments made under these IDR plans will count toward forgiveness under IDR and PSLF.”
Student Loan Payments Could Resume Much Sooner Than 2028
Student loan borrowers should not assume that the SAVE plan forbearance will last for nearly three more years. While the plan is due to be repealed by mid-2028, borrowers could be forced into repayment much sooner than that if there are additional court decisions in the ongoing legal challenge, which is expected. While the SAVE plan has been blocked due to an injunction (which prohibits the Department of Education from implementing SAVE while the litigation continues), there has yet to be a final ruling in the case. If a court issues a final ruling striking down the SAVE plan, which is a very real possibility, then borrowers may have to quickly change repayment plans. That ruling could happen at any time.
For some borrowers, there may be very real reasons to apply to switch to a different IDR plan now, rather than waiting for the forbearance to end. For example, borrowers who want to resume making progress toward student loan forgiveness, particularly PSLF, have an incentive to get back into a qualifying repayment plan sooner rather than later, especially if they expect their income to increase in the future (which could mean higher monthly payments). And those who are concerned about their loan balances increasing due to interest may also want to consider leaving the forbearance and getting back into repayment.
For other borrowers who are unconcerned with student loan forgiveness progress or interest accrual, remaining in the SAVE plan forbearance may make sense. But these borrowers should remain vigilant. While it’s possible the forbearance could continue for many more months, a new court ruling in the ongoing legal challenge could force them back into repayment at any time. And while the broader IDR system is currently plagued with delays and dysfunction due to a 1.3 million IDR application backlog, that backlog may get a whole lot worse if more than seven million additional borrowers rush to submit IDR applications simultaneously if the SAVE plan forbearance comes to an abrupt end in the wake of a new court decision.