Education Department Orders Over 7 Million SAVE Borrowers to Choose New Repayment Plans After Court Ruling
The U.S. Education Department says more than 7 million federal student loan borrowers enrolled in President Biden’s SAVE income‑driven repayment plan will start getting notices Friday directing them to move into different repayment plans after the 8th Circuit Court of Appeals struck SAVE down earlier this month. Borrowers in SAVE have been in forbearance since July 2024 while lawsuits proceeded, but interest has been accruing since a ruling last summer blocked implementation, meaning some now owe more than when payments paused. Beginning July 1, loan servicers will give affected borrowers 90 days to select from existing repayment options, most of which will mean higher monthly payments because the most generous terms — payments as low as 5% of discretionary income and quicker forgiveness for smaller balances — are now off the table. Under Secretary of Education Nicholas Kent, reflecting the Trump administration’s stance, said “the days of unlawful loan forgiveness are behind us” and emphasized that borrowers are responsible for repayment, while advocates warn millions will face a renewed affordability crunch just as new rules also phase out unemployment and economic‑hardship deferments for future borrowers. The move caps years of political back‑and‑forth in Washington over student‑debt relief and signals a decisive shift away from Biden‑era efforts to ease repayment burdens, a change that’s already drawing alarm from borrower groups on social media who describe feeling “whiplash” from constantly changing rules.
📌 Key Facts
- More than 7 million borrowers currently enrolled in the SAVE plan will receive notices instructing them to pick new repayment plans.
- Starting July 1, 2026, loan servicers will provide SAVE borrowers 90 days to select a different plan, after which higher payments will generally apply.
- The 8th Circuit Court of Appeals struck down the SAVE plan earlier this month; borrowers have been in forbearance since July 2024, but interest has been accruing since a separate ruling last summer blocked implementation.
- SAVE had allowed payments as low as 5% of discretionary income and forgiveness after 10 years for borrowers with original balances of $12,000 or less; the most generous remaining income‑driven plans now require at least 10% of discretionary income.
- Under Secretary Nicholas Kent said the Trump administration considers broad loan‑forgiveness efforts unlawful and is tightening deferment options for new borrowers, including ending unemployment and economic‑hardship deferments going forward.
📊 Relevant Data
Approximately 30.2% of Black adults report having student loan debt, compared to 20% of White adults, despite Black individuals comprising about 13.4% of the U.S. population and White individuals about 59%.
Student Loan Debt By Race Statistics — Student Loan Planner
Black borrowers have an average student loan debt of $52,000, compared to $32,000 for White borrowers, with disparities potentially linked to differences in family wealth and types of institutions attended.
Student Loan Debt by Race — Investopedia
Over half of Black student loan borrowers (around 53%) have at least $25,000 in student loan debt from their own education, versus 41% of White borrowers.
Examining Student Loan Debt by Race: 2024 Statistics — BestColleges
Black borrowers are more likely to have student loan balances that exceed their original borrowed amount, with 64% reporting this compared to fewer among White borrowers.
The Student Loan Default Divide: Racial Inequities Play a Role — Pew Charitable Trusts
66% of Black undergraduate students use student loans to pay for school, compared to 47.4% of White undergraduate students, while 54.5% of total student loan money goes to White students.
Student Loan Debt by Race [2026] — Education Data Initiative
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