SAVE student loan borrowers receive 90-day notices to select new plans

Following a federal court order that ended the SAVE student loan repayment plan, the U.S. Department of Education has begun notifying millions of affected borrowers that they must select a new repayment option.

Borrowers are receiving 90-day notices from loan servicers, such as MOHELA, to choose a new plan. While receiving this notice does not mean a borrower is in default, failing to act within the 90-day window allows the loan servicer to automatically enroll them in a different plan.

For many, this automatic switch could result in a move to the Standard Repayment Plan or the Tiered Standard Plan. Unlike the SAVE Plan, which tied monthly payments to income, these default options typically involve fixed payments based on the total loan balance, which may significantly increase monthly costs for those previously paying $0 per month.