The SAVE Plan is Dead: Major Update for Borrowers and Best Alternatives in 2025

Were you counting on $0 student loan payments under the SAVE Plan? You're not alone—and now, everything feels up in the air.

A federal court issued an injunction that stops key parts of the SAVE (Saving on a Valuable Education) Plan, eliminating generous benefits like $0 monthly payments and faster forgiveness.

So what does this mean for you—and what are your best next steps? This guide breaks down the current status of SAVE, how it affects your loans, and alternative income-driven repayment (IDR) options to consider.

Key takeaways

• A court order has formally blocked major benefits of the SAVE Plan, including the $0 monthly payment for low-income borrowers
• Existing SAVE enrollees will remain in the program, but will likely benefit from switching to an alternative payment plan
• Alternative IDR plans, including the new Repayment Assistance Plan (RAP), could provide similar relief

What is the SAVE plan, and why is it paused?

The SAVE Plan was a newer income-driven repayment (IDR) plan introduced by the Biden administration as a replacement for REPAYE.

Its goal? To lower monthly payments—sometimes to $0—for low-income borrowers and shorten the path to forgiveness.

But in 2025, a federal court found that the SAVE plan was illegal, citing concerns about executive overreach. With the Department of Education preparing to implement the court’s order, many borrowers are left wondering how to manage payments in the meantime.

TuitionHero Tip

Already on SAVE? Prepare to switch plans—and keep an eye on updates from Federal Student Aid.

Are any parts of the SAVE plan still active?

No—courts have declared the entire SAVE plan illegal. That means no parts of the plan, including $0 minimum payments and a 10-year forgiveness timeline, remain active.

While the case made its way through the court system, SAVE borrowers were placed on forbearance with no interest charges. Following the ruling, however, that’s changing.

SAVE borrowers will begin accruing interest on August 1, 2025, according to the Department of Education. What’s more, they need to switch to an alternative, legally-compliant payment plan.

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What are the best fallback IDR options right now?

If you were counting on the paused benefits of SAVE, you still have some alternatives.

However, with the recent One Big Beautiful Bill Act (BBB) introducing major changes to income-driven student loan repayment, your options could be limited.

Current status of top IDR plans:

• ICR (Income-Contingent Repayment): The ICR plan has been eliminated under the BBB, with the Education Department instructed to remove the plan by 2028.
• PAYE (Pay As You Earn): The PAYE plan has also been eliminated with the same deadline.
• IBR (Income-Based Repayment): The IBR plan remains active—but only for existing borrowers. New borrowers will not have access.
• RAP (Repayment Assistance Plan): The RAP is a new IDR plan created under the BBB, offering an additional option for borrowers.

TuitionHero Tip

If you're not sure which plan fits best, try the Loan Simulator at StudentAid.gov.

How do the different IDR options compare?

At this time, only IBR and RAP plans appear to be viable IDR options following the elimination of SAVE, ICR, and PAYE. Here’s a quick breakdown of how the plans compare:

What should borrowers do with SAVE gone?

Here’s how to stay ahead of the curve:

1. Don’t panic: You still have time to switch to a legally compliant payment plan.
2. Review your income: If you qualified for $0 under SAVE, check if RAP or IBR helps.
3. Don’t miss recertification Deadlines: Income recertification impacts your monthly bill.
4. Track court decisions: While unlikely, future decisions could impact the court’s ruling.

Why trust TuitionHero

At TuitionHero, we help you find the best private student loans by comparing top lenders and breaking down eligibility, interest rates, and repayment options. Whether you need additional funding beyond federal aid or a loan without a cosigner, we simplify the process. We also provide expert insights on refinancing, FAFSA assistance, scholarships, and student credit cards to support your financial success.

Frequently asked questions (FAQ)

Do I need to switch repayment plans now?

Yes. With interest set to start accruing on August 1st, SAVE borrowers should look into switching to a new payment plan.

Can I still apply for SAVE?

No. The SAVE plan is no longer available. It was eliminated as a result of recent court rulings.

Will I owe back payments if I was at $0?

No. Payments made under the paused provisions of the SAVE plan are still considered valid. They will count toward forgiveness and other program benefits.

What if my income dropped recently?

Update your income early through your loan servicer. This may help you qualify for lower monthly payments. Taking action sooner can reduce your financial burden.

Is forgiveness still happening under SAVE?

The SAVE plan has been eliminated. However, loan forgiveness is still possible. Other income-driven repayment (IDR) plans continue to offer forgiveness options.

Final thoughts

While the SAVE plan brought significant benefits, it is no longer available after recent court rulings.. Following new legislation, borrowers still have access to RAP and IBR plans.

Navigating loan changes can be overwhelming—but you’re not alone. At TuitionHero, we’re committed to helping you stay informed, empowered, and on track to financial success.

Source

• Court Ruling Affirms Blocking of SAVE Plan While Next Steps for the Program Remain Uncertain
• Department of Education Updates on Saving on a Valuable Education (SAVE Plan)
• IDR Plan Court Actions: Impact on Borrowers | Federal Student Aid
• OBBB Passes: Student Loan Borrowers Severe Impacts
• Big Bill Means Big Changes For Student Loan Borrowers: What You Need to Know