More than 7 million student loan borrowers are in a defunct payment plan — what that means for their money

The SAVE plan is officially defunct, but millions of student loan borrowers remain enrolled in the program — a decision that may cost them greatly.
After lengthy legal battles, a federal appeals court earlier this month ordered the end of the Saving on a Valuable Education, or SAVE, plan, the Biden administration-era repayment program that aimed to dramatically lower borrowers' monthly bills.
Borrowers enrolled in SAVE have been in a forbearance since July 2024 while the legal challenges played out, meaning they didn't need to make payments on their debt. Any payments they choose to make don't count toward loan forgiveness.
While the Trump administration has allowed borrowers to remain in the payment pause for now, it's expected to end the reprieve soon. Interest began accruing on SAVE enrollees' debts in August.
Still, SAVE enrollees have been slow to exit the program: roughly 7.2 million people were enrolled in the forbearance as of December, according to recently released data by the U.S. Department of Education. A year earlier, in Dec. 2024, that number was around 7.9 million borrowers.
"They may not need to make a payment today, but their loan debt is quietly growing, and they are not making progress towards any loan forgiveness provided under the law," said Scott Buchanan, executive director of the Student Loan Servicing Alliance, a trade group for federal student loan servicers.
Here's what to know about the consequences of remaining in the SAVE forbearance — and what your other options are.
Why borrowers are still in SAVE
There are several reasons so many borrowers remain in the defunct SAVE plan, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
Some believe they can't afford the payments under other plans, Nierman said, while others are confused about the status of SAVE. Some may be waiting in the U.S. Department of Education's backlog of pending applications for a new repayment plan, or had their application denied.
Staying in SAVE comes with consequences
Borrowers who remain in the SAVE payment pause will see their debt mushroom from interest, said higher education expert Mark Kantrowitz.
The typical SAVE enrollee has a loan balance of around $57,000 and a 6.7% interest rate, according to Kantrowitz's calculations. That would mean their debt has grown by over $2,500 since interest accrual resumed in August, he calculated.
Student loan borrowers in SAVE are also not making any progress toward debt forgiveness, under either the terms of their repayment plan or under Public Service Loan Forgiveness.
Borrowers who wait until they're forced to leave SAVE could run into even more trouble getting into a new repayment plan, Kantrowitz said.
"With 7.2 million borrowers filing an income-driven repayment plan request, the U.S. Department of Education is unlikely to be able to process those forms in a timely manner," he said. "Borrowers who file the form now will be at the front of the list."
As a result, they'll likely avoid long wait times and more interest accruing on their debt, Kantrowitz added.
Switching repayment plans can be costly, too
It's understandable that borrowers are worried about their payments jumping under other plans.
Most experts say that the best active repayment plan at the moment is the Income-Based Repayment plan. IBR, like SAVE, is an income-driven repayment plan that caps borrowers' monthly bills at a share of their discretionary income and eventually leads to debt cancellation.
But even SAVE borrowers who switch to IBR could see their monthly bills double. That's because the SAVE plan calculated payments based on 5% of a borrower's discretionary income. IBR takes 10% — and that share rises to 15% for certain borrowers with older loans.
Still, very-low-income borrowers could have a monthly bill of just $13 under IBR, according to a calculation by Kantrowitz.
There are tools available online to help you determine how much your monthly bill would be under different repayment plans.
Borrowers worried they can't afford their monthly payments should also see if they are eligible for any payment pauses where interest won't accrue — such as the unemployment deferment if you have direct subsidized loans, consumer advocates say.
If your repayment plan application was denied, whatever the reason, you should submit a new one as soon as possible, experts say. While there's a large backlog of repayment plan applications, the Education Department has recently made progress in processing the forms.