:max_bytes(150000):strip_icc()/GettyImages-2187330836-43bde2e2ac734e91b10a10373f975918.jpg "Millions of Student Loan Borrowers Will Soon Have Higher Monthly Payments")
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KEY TAKEAWAYS
- Millions of borrowers on the Saving for a Valuable Education plan will soon need to move to another repayment plan and resume making payments for the first time in over a year.
- Depending on a borrower’s situation, their new monthly payments could be anywhere from $10 to $500 more than what they were under the SAVE plan.
The Saving for a Valuable Education repayment plan for federal student loans is coming to an end, which means millions of borrowers need to choose a new, and likely more expensive, plan.
Borrowers on the SAVE plan have been in administrative forbearance since July 2024. During that time, they did not have to make payments, and interest didn’t accrue until August 2025. However, the Department of Education recently announced an agreement with the states that filed a lawsuit last year to end the SAVE plan.
The Education Department said 7.7 million borrowers will soon be required to leave the SAVE plan, an income-driven repayment plan introduced by the Biden administration. There’s no date set yet for when borrowers will be forced out of SAVE, but the department suggested all SAVE borrowers to transfer to another repayment plan now.
Earlier this year, the Department of Education encouraged all SAVE borrowers to transition into the Income-Based Repayment plan. The IBR plan is likely the most stable option for SAVE borrowers right now, as the other two active income-driven repayment plans, Income-Contingent Repayment and Pay as You Earn, will be eliminated after July 1, 2028.
The Repayment Assistance Plan, a new income-driven repayment plan introduced by the “One Big, Beautiful Bill,” will provide monthly payments that are cheaper than those under the IBR plan for some borrowers. However, this repayment plan will not be available until at least July 1, 2026.
Why This Matters
Payments on Federal student loans are ramping back up quickly for millions of Americans, most of whom are already struggling under the weight of high prices. That can hurt the broader U.S. economy, as these households cut back on other spending and expenses to make up the difference.
Payments For The Median Borrower
Most borrowers’ payments are based on their income and family size. The median yearly income for a worker with a bachelor’s degree is $80,132, according to the Bureau of Labor Statistics.
A single borrower with the median income would pay about $100 more a month on IBR and PAYE compared to SAVE. Their payments on ICR would be about $200 more per month, and RAP would cost about $160 more per month.
The difference is even more dramatic for a borrower who makes the median income and has a spouse and two kids. On IBR and PAYE, they would pay $200 more a month than on SAVE. On ICR, their payments would be more than $500 a month, and RAP payments are about $370 more a month.
| SAVE | IBR | PAYE | ICR | RAP | |
| Payments for a single borrower with the average income | $374.33 | $472.00 | $472.00 | $585.00 | $534.21 |
| Payments for a spouse and two kids with the average income | $64.95 | $266.00 | $266.00 | $584.00 | $434.21 |
Payments For a Lower-Income Borrower
Consider a student loan borrower working in early childhood education, which is generally the lowest-paying position for someone with a Bachelor’s degree. The median wage for this type of worker mid-career is $49,000, according to the Federal Reserve Bank of New York.
A single borrower in early childhood education would have to pay about $100 more per month on IBR or PAYE, and $200 more on ICR compared to SAVE. The RAP plan would be a better option for them, since it would only be about $50 more per month, but this plan won’t be available until mid-2026.
The SAVE plan had very generous terms, making payments for all borrowers less expensive compared to other income-driven repayment plans. According to the White House, more than half of borrowers on the SAVE plan qualified for $0 monthly payments.
For example, an early childhood educator with the same wages, but with a spouse and two kids, would have qualified for a $0 payment on SAVE. The IBR or PAYE plan will be the most affordable option for them now, with monthly payments of only $10.
| SAVE | IBR | PAYE | ICR | RAP | |
| Single borrower with a lower income | $114.90 | $213 | $213 | $337 | $163.33 |
| Borrower with a spouse and two kids with a lower income | $0 | $10 | $10 | $281.00 | $63.33 |
