What the end of SAVE student loan forbearance means for your debt

The interest-free pause on student loan payments under the federal SAVE plan has officially ended, marking a significant shift in how millions of Americans will manage their debt going forward. What was once a rare reprieve—a window of time where no payments were required and interest didn’t accrue—has now been replaced with rising costs and fewer repayment choices. If you’ve relied on the SAVE program to stay afloat or keep your monthly bill low, this policy change likely requires a major rethink of your debt strategy.

Originally introduced in 2023, the SAVE plan—short for Saving on a Valuable Education—was designed to be the most generous federal student loan repayment option in history. Unlike previous income-driven repayment (IDR) plans, SAVE capped payments at just five percent of a borrower’s discretionary income and completely waived the accumulation of unpaid interest. For many borrowers with low or moderate incomes, this meant predictable, reduced payments and no compounding debt. The relief was immediate and impactful. As of early 2025, more than 7.7 million federal student loan borrowers had enrolled in SAVE, taking advantage of its borrower-friendly structure.

However, a wave of legal challenges led by Republican-led states questioned the legality of SAVE and ultimately prevailed. Congress repealed the program, and the Trump administration ended the interest waiver on August 1. Going forward, any federal student loan borrower who remains in the so-called SAVE forbearance period will see their balances begin to grow again if they do not make payments large enough to cover interest. Though the Department of Education confirmed that interest would not be charged retroactively, this protection only applies to the past. From now on, inaction comes at a cost.

The numbers make this very real. A borrower with an average federal student loan balance of around $39,000 and an interest rate of approximately 6.7 percent will accumulate over $219 in interest per month if they remain in forbearance without making payments. That adds up to more than $2,600 in interest annually—interest that is quietly compounding and enlarging the total balance, even if you make no changes to your repayment status. For borrowers who had grown accustomed to a sense of control and predictability under SAVE, the resumption of interest feels like a step backward.

While staying in the forbearance period is technically still an option, the financial implications make it an unsustainable one for most borrowers. With interest accumulating again, remaining idle risks long-term harm to your finances. What was once a protective shield has become, in many ways, a liability. Even though this shift has caught many borrowers off guard, there are still repayment plans available—and now is the time to assess which one best matches your income, life stage, and financial goals.

The most immediately viable option for many former SAVE enrollees is the Income-Based Repayment (IBR) plan. Like SAVE, IBR adjusts your monthly student loan bill based on your income and family size. However, it is less generous in its formula. IBR typically requires borrowers to pay 10 percent of their discretionary income, rather than five percent under SAVE. For borrowers with older loans, that rate may climb as high as 15 percent. As a result, monthly payments under IBR could nearly double for some who were previously on SAVE. Despite this increase, IBR still offers long-term forgiveness—typically after 20 or 25 years of qualifying payments—and allows for continued eligibility for certain deferments and subsidies. For low-income borrowers, the actual monthly bill could remain as low as $13, but that number can rise sharply with even modest income gains.

Another option is the Standard Repayment Plan. This plan divides your outstanding loan balance into equal monthly payments over a fixed ten-year schedule. It is the most direct path to paying off debt in full, but it comes with the highest short-term burden. A borrower with a $39,000 balance and a 6.7 percent interest rate would owe around $450 per month under this plan. That level of repayment is simply unaffordable for many borrowers who had adjusted to the lower bills under SAVE. Furthermore, this plan does not include a forgiveness feature. Every dollar—principal and interest—must be paid in full. For borrowers whose income is volatile or who are supporting dependents, the Standard Plan offers little flexibility and few safety nets.

It is also important to consider temporary deferment or forbearance options that still exist outside of the repealed SAVE program. If you are unemployed or experiencing a documented financial hardship, you may qualify for unemployment deferment, particularly if you have subsidized federal loans. In those cases, interest on subsidized loans may be paused for a limited period, offering some breathing room. However, these deferments do not erase your responsibility to repay the debt and should be viewed as stopgaps, not long-term solutions.

Looking ahead, the repayment landscape will shift again. Congress’s repeal of SAVE included a provision to introduce a new repayment structure called the Repayment Affordability Plan, or RAP. This plan is not yet active and is not expected to roll out until 2026. Its full details have not been finalized, but it is designed to be a simplified IDR model. For now, however, the available options are limited, and borrowers must decide how to bridge the next one to two years before RAP becomes an option.

In this transitional period, the most effective approach is to treat repayment decisions as strategic—not emotional. If your goal is to remain eligible for forgiveness, then switching to IBR and continuing timely payments preserves that path. If you have the financial capacity to pay down your debt aggressively, the Standard Repayment Plan may help you minimize the total interest paid. If your income is currently unstable, a deferment or economic hardship forbearance may be necessary for a few months. But what matters most is that you make a conscious, informed choice rather than letting interest accrue passively.

One of the most important steps borrowers can take now is to check their loan status through their servicer’s portal. Look closely at your current balance, accrued interest, and repayment designation. Some borrowers have reported seeing interest charges mistakenly added during the forbearance period—charges that should not have been applied retroactively. If you notice discrepancies, document them and contact your loan servicer immediately.

You should also use the Education Department’s online repayment simulator to estimate your monthly bill under different repayment plans. Seeing the side-by-side comparison between IBR and Standard can help you project not just your payments today, but your debt balance years from now. Don’t rely on guesswork. If your current income, family size, or employment status has changed, update that information to reflect your most accurate financial situation.

Understanding your repayment timeline is also critical. If you’re aiming for forgiveness through an IDR plan, you’ll need to make at least 20 years of qualifying payments—possibly more depending on your loan type and when you first borrowed. That means missing even one or two recertification deadlines could set you back significantly. Be sure to set calendar reminders to recertify your income annually. It’s a small administrative task, but its impact on your financial future is enormous.

For borrowers whose goal is to eliminate their loans entirely in the next five to ten years, paying more now could make sense. The Standard Repayment Plan front-loads the pain but reduces long-term interest costs. However, this approach is only feasible if your income supports it. A high monthly bill that forces you to carry credit card debt or delay essential expenses is rarely a wise tradeoff. Flexibility matters—not just in policy, but in personal cash flow.

As you make decisions, avoid comparing your repayment journey to someone else’s. Two people with the same balance could face vastly different repayment paths depending on income, household size, and job stability. What matters is whether your plan is sustainable, minimizes unnecessary interest, and aligns with your goals. For many, that means choosing IBR today, monitoring legislative developments, and reassessing in 2026 when RAP becomes available.

Ultimately, the end of SAVE forbearance is not just a policy change. It’s a reminder that student loan management is not static. It evolves with your life, your income, and the political climate. The most successful borrowers are not necessarily the ones with the highest salaries. They are the ones who track their repayment status, make informed decisions, and act before interest spirals out of control.

You don’t need to panic, overhaul your finances, or rush into a ten-year payoff plan. What you need is visibility: visibility into your loan terms, your monthly payment options, and the true cost of delay. That visibility allows you to stay in control, even when the policies shift beneath your feet.

There is no perfect repayment path—only better ones. And in a moment where interest is no longer paused and new plans have not yet arrived, the better path is the one that prevents your debt from growing silently. Whether you stay in IBR or explore deferment options, the goal is the same: avoid passive accumulation. Protect your progress. Recenter your plan.

Slow is still strategic. Even if SAVE is gone, your ability to manage debt with clarity and purpose remains entirely in your hands.