Save Plan Student Loans

What Is the SAVE Plan?

The Saving on a Valuable Education (SAVE) plan was an income-driven repayment (IDR) option introduced by the Biden administration in 2023 to replace the earlier REPAYE plan. SAVE offered the lowest monthly payments of any IDR plan, reducing payments on undergraduate loans to 5% of discretionary income above 225% of the federal poverty line, compared with 10% under older plans. It also eliminated unpaid interest accrual for borrowers making their full monthly payment.

Eligibility was broad: any borrower with federal Direct loans in good standing could enroll, regardless of when they borrowed. At its peak in early 2024, over 8 million borrowers were enrolled in SAVE, according to Department of Education data.

Note: As of early 2026, the SAVE plan is not accepting new enrollments, and most borrowers enrolled in SAVE are placed in an interest-free forbearance. The Department of Education has paused billing for these borrowers while litigation proceeds.

The plan's key innovation, the 5% payment floor and the interest waiver, made it the most affordable option for many borrowers. But those same features were challenged in court, leading to the current legal deadlock.

The SAVE plan was blocked by two separate federal court rulings in 2024. The 10th Circuit Court of Appeals issued an injunction in one lawsuit, and the 8th Circuit did the same in another. Both cases argued that the Department of Education exceeded its statutory authority under the Higher Education Act by creating a repayment plan that effectively provided faster loan forgiveness than Congress authorized.

In February 2025, the 8th Circuit ruled that the SAVE plan was not authorized by the Higher Education Act and upheld the injunction. The case is now before the U.S. Supreme Court, with oral arguments expected in early 2026. A decision could come as early as late 2026 or early 2027.

For borrowers currently enrolled in SAVE, here are the consequences as of early 2026:

• No payments due. Borrowers are placed in an interest-free forbearance. No monthly payment is required.
• No forgiveness progress. Forbearance months do not count toward PSLF, IDR forgiveness, or any other forgiveness program, unless you separately qualify under a different IDR plan.
• No new enrollments. If you are not already in SAVE, you cannot apply. Your only IDR options are PAYE, IBR, or ICR.
• Interest capitalization risk. When the forbearance ends, unpaid interest may be capitalized (added to principal) unless Congress or the Education Department intervenes.

For borrowers who need payments to count for PSLF, the only option is to switch to a different IDR plan, PAYE or IBR, which is currently permitted even while SAVE is blocked. However, switching to PAYE or IBR may result in higher monthly payments compared with SAVE.

Related reading: The Big Changes Coming to Federal Student Loans July 1 outlines upcoming modifications to IDR plans and borrower protections.

With SAVE unavailable, borrowers who need an IDR plan, either to lower monthly payments or pursue forgiveness, have three primary options: PAYE, IBR, and ICR. Each has different eligibility rules, payment formulas, and forgiveness timelines.

PAYE, Pay As You Earn, caps payments at 10% of discretionary income and forgives any remaining balance after 20 years of qualifying payments. It is the closest available alternative to SAVE, though payments will be higher because the income protection is lower (150% vs 225%).

IBR (Income-Based Repayment) has two versions: for borrowers who first borrowed before July 1, 2014, payments are 15% of discretionary income with forgiveness after 25 years. For newer borrowers, it's 10% for 20 years.

ICR (Income-Contingent Repayment) is the least generous option. Payments are 20% of discretionary income or a fixed 12-year payment, whichever is lower. Forgiveness is after 25 years. Because of the lower payment cap, SAVE was more generous for most borrowers.

Choosing among these plans depends on your income, family size, loan balance, and forgiveness goals. For PSLF-eligible borrowers, only qualifying payments made under an eligible IDR plan (PAYE, IBR, or ICR) while working full-time for a qualifying employer count toward forgiveness.

For borrowers not pursuing PSLF, the Extended Graduated Repayment Plan or the Standard Repayment Plan may be simpler options if you can afford the monthly payment. They don't offer forgiveness but can keep total interest lower for higher-income borrowers.

The biggest change for SAVE borrowers in 2026 is the ongoing court-ordered forbearance. As of early 2026, no SAVE payments are being collected, and no new enrollments are being accepted. However, several developments are worth noting:

• 8th Circuit ruling stands. The appeals court struck down the SAVE plan. The case is now with the Supreme Court.
• PSLF waiver ended. The limited PSLF waiver that allowed past non-qualifying payments to count expired October 31, 2022. The IDR account adjustment (which was counting certain past periods) also ended in 2024.
• IDR recalculation paused. The Department of Education has paused all IDR recalculations for SAVE borrowers, meaning borrowers cannot switch to another IDR plan without a new application.
• Interest-free forbearance continues. No interest accrues while forbearance is in effect, but these months still do not count toward forgiveness.

Borrowers who stay in SAVE forbearance face a risk: if the plan is ultimately struck down, you may need to enter a different plan, and months in forbearance will not count. For PSLF seekers, switching out of SAVE now is the only way to start counting months again.

The Department of Education (StudentAid.gov) maintains the official status page for the SAVE plan. As of February 2026, the guidance is unchanged: no new enrollments; existing borrowers in forbearance.

Related reading: See the full Changes to 2026 2027 Federal Student Loans for a broader overview of upcoming policy shifts.

Expert Tips

• If you're in SAVE forbearance and pursuing PSLF, LEARN MORE to switch to PAYE or IBR so the months start counting again.
• Use the Department of Education's Loan Simulator at StudentAid.gov to estimate payments under PAYE and IBR before switching.
• If you're not pursuing forgiveness and your income is high, the Standard Plan may be cheaper than IDR in total interest paid.
• Set a calendar reminder to check StudentAid.gov status every 90 days, the forbearance could end without much advance notice.
• Consider the Changes to Student Loans You Need to Know page for ongoing updates to federal student loan policy.

Mistakes to Avoid

• Ignoring the forbearance. Assuming no payments means no action required. You may miss the window to switch to a counting IDR plan if you wait too long.
• Believing months in forbearance count for forgiveness. They do not. Only qualifying payments under an eligible IDR or PSLF plan count.
• Not filing your IDR recertification. Even while on forbearance, you still need to recertify your income annually if you want to switch to another IDR plan. Missing the recertification deadline could put you into a non-IDR repayment plan.
• Relying on SAVE returning. The legal and political climate makes a full reinstatement unlikely. Plan for a world without SAVE.

Pros and Cons

👍 Pros of SAVE (before the block):

• Lowest monthly payments of any IDR plan
• Interest subsidy prevented unpaid interest from growing
• Faster forgiveness for smaller loans (10 years for $12k or less)

👎 Cons of SAVE (current status):

• Completely unavailable for new enrollments
• Forbearance months do not count toward forgiveness
• Risk of interest capitalization when forbearance ends
• No path to PSLF progress while in forbearance

Bottom Line

The SAVE plan was the most generous IDR option ever created, but it is blocked by federal courts and unlikely to return. Borrowers should not rely on it. If you need lower payments or a path to forgiveness, switch to PAYE or IBR now. This article is for informational purposes only and does not constitute personalized financial advice. Consult the Department of Education or a qualified student loan counselor for guidance specific to your situation.