The SAVE Plan Has Been Terminated: What PSLF Borrowers Must Do Now

The SAVE Plan Has Officially Been Terminated

The federal SAVE repayment plan has officially been struck down following a March 2026 ruling by the U.S. Court of Appeals for the Eighth Circuit. The court ordered the termination of the program, ending one of the most generous income-driven repayment plans created for federal student loan borrowers.

For the millions of borrowers who enrolled in SAVE — including many pursuing Public Service Loan Forgiveness (PSLF) — the ruling creates immediate uncertainty about repayment options and the path toward forgiveness.

If you were enrolled in SAVE or placed into SAVE-related forbearance during the legal challenges, here’s what you need to know about what happens next.

Key Takeaways for SAVE Plan Borrowers

The SAVE repayment plan has been officially terminated by a federal appeals court.
More than 7 million borrowers will need to move into a new repayment plan.
SAVE-related forbearance generally does not count toward PSLF.
Borrowers pursuing PSLF should consider switching into a qualifying repayment plan to restart progress.
Alternative repayment options include IBR, PAYE, ICR, the Standard Plan, or the upcoming RAP program.

Why the SAVE Plan Was Shut Down

The SAVE plan was introduced in 2023 as a replacement for the REPAYE repayment plan. It reduced payments for many borrowers and provided unique benefits such as stronger interest protections and lower income-based payment calculations.

However, several states challenged the plan in federal court, arguing that the Department of Education exceeded its authority when creating the program.

In March 2026, the Eighth Circuit Court of Appeals reversed a lower court decision and ordered the SAVE plan to be terminated, effectively ending the program nationwide.

As a result:

The SAVE repayment plan is no longer available.
Borrowers currently enrolled will need to move into a different repayment plan.
The Department of Education is expected to provide additional guidance on the transition process.

More than 7 million borrowers were enrolled in SAVE at the time of the ruling, making this one of the largest disruptions to federal student loan repayment programs in recent years.

What Happens to Borrowers Who Were Enrolled in SAVE?

Borrowers who enrolled in SAVE during the legal challenges were placed into an administrative forbearance while the courts determined the program’s fate.

Now that the plan has been terminated:

Borrowers will eventually need to transition into a different repayment plan
Monthly payments are expected to resume once borrowers select a new plan
Many borrowers may see higher monthly payments compared to SAVE

The Department of Education has not yet finalized the exact timeline, but officials have indicated that borrowers will have a limited period to choose a new repayment option.

Does SAVE Forbearance Count Toward PSLF?

In most cases, months spent in SAVE litigation forbearance do not count toward PSLF or IDR forgiveness.

During this period:

Borrowers were not required to make payments
Progress toward forgiveness generally paused
Interest began accruing again in August 2025

For borrowers working toward Public Service Loan Forgiveness, this means restarting qualifying payments as soon as possible is often the best way to stay on track.

Some borrowers may also explore PSLF buyback options to potentially regain credit for paused months, depending on Department of Education guidance.

Repayment Options After the SAVE Plan

Borrowers leaving the SAVE plan will need to transition into another federal repayment plan.

Option 1: Income-Driven Repayment (IDR) Plans

Income-driven repayment plans remain one of the most common strategies for borrowers pursuing PSLF.

Currently available IDR options include:

IBR (Income-Based Repayment)
PAYE (Pay As You Earn)
ICR (Income-Contingent Repayment)

These plans calculate monthly payments based on income and family size.

For borrowers pursuing Public Service Loan Forgiveness, payments made under these plans count toward the required 120 qualifying PSLF payments when combined with eligible public service employment.

Recent regulatory changes have also expanded eligibility for IBR by removing certain income restrictions, allowing more borrowers to qualify.

Option 2: The Standard Repayment Plan

The 10-year Standard Repayment Plan is also eligible for PSLF.

Pros:

Fixed monthly payments
No income documentation required
Counts toward PSLF if loans were not consolidated

Cons:

Payments are often higher than income-driven plans
Not ideal for borrowers seeking lower monthly payments

For borrowers nearing the 120-payment PSLF threshold, this plan may sometimes make sense depending on remaining balance and income.

Option 3: The New Repayment Assistance Plan (RAP)

Another option expected to become available is the Repayment Assistance Plan (RAP), scheduled to launch this summer.

Key features include:

Payments calculated as a percentage of Adjusted Gross Income
Payment rates ranging roughly from 1% to 10% of income
Loan forgiveness after 30 years of repayment
Counts towards PSLF

Will Monthly Payments Increase?

For many borrowers, yes.

SAVE was designed to be one of the most affordable repayment plans ever created. Without it, borrowers moving into older repayment programs may see their payments increase significantly.

In some cases, payments could rise several times higher than what borrowers were previously paying under SAVE.

Borrowers should review repayment options carefully before selecting a new plan.

Should PSLF Borrowers Switch Plans Now?

The right timing depends on your situation.

You may want to switch sooner if:

You are actively pursuing Public Service Loan Forgiveness
You want to restart qualifying payments
Your loans are currently accruing interest

You may consider waiting if:

You are reviewing long-term repayment options
You are waiting for official guidance from the Department of Education
You want to compare future repayment programs such as RAP

Because federal guidance is still evolving, monitoring updates from your loan servicer and the Department of Education is important.

What PSLF Borrowers Should Do Next

If your goal is Public Service Loan Forgiveness, the most important next steps are:

Confirm you are working for a qualifying employer
Select a PSLF-eligible repayment plan
Resume qualifying monthly payments

While the SAVE plan is ending, PSLF itself remains unchanged.

Forgiveness is still available after 120 qualifying payments — but your repayment plan will now play a much bigger role in determining how quickly you reach that milestone.

How PeopleJoy Helps Employers and Borrowers Navigate Student Loan Changes

Federal student loan policy is changing rapidly — and the end of the SAVE plan is another example of how confusing repayment decisions can become for borrowers.

Employees often struggle to determine: