SAVE Plan Blocked: Impact on Your Student Loan Repayment

• On February 18, a federal court slammed the brakes on SAVE’s promise of lower monthly payments, leaving 8 million borrowers in legal limbo.

• Your PSLF credits and forgiven loans are secure. This ruling doesn’t affect what you’ve already earned.

• Income-based repayment is your safest bet. It’s the only income-driven plan with forgiveness written in law, even if the payments are higher.

The latest SAVE Plan litigation updates have thrown 8 million borrowers into legal limbo. On February 18, a federal court slammed the brakes on the lower monthly payments promised by the SAVE Plan, leaving student loan borrowers unsure of what’s next.

With the Education Department under Secretary McMahon dodging defense of Biden’s signature income-driven plan—and President Trump hinting at dismantling the department entirely—everything is murky and messy.

This political uncertainty has sent shockwaves through the federal student loan system.

What repayment options can you count on? Should you switch plans now? How will this affect your forgiveness eligibility? And is Public Service Loan Forgiveness still safe?

Here’s what’s changing and how to stay ahead.

If you’re in the SAVE plan, your student loans stay on forbearance while the case runs its course in district court.

If you applied for SAVE before the ruling, your application might be stuck in processing limbo, and you may need to switch to another income-driven repayment plan.

But should you switch plans?

If your IDR tracker shows you’re close to loan forgiveness, move to a plan like IBR right away. IBR is the only plan that legally guarantees forgiveness.

Related: Should I Switch From SAVE to IBR?

But if you’re still years away from your goal, staying in forbearance might give you room to cover your bills or build savings even though other plans cost more than SAVE.

What about being “grandfathered” into SAVE? That’s unlikely.

The new ruling suggests that SAVE is off the table because the Education Department doesn’t have the authority to offer forgiveness through it. You won’t be grandfathered into a plan the court deems unauthorized.

IBR, ICR, and PAYE are still on the table. But the ruling casts doubt on forgiveness for ICR and PAYE. If you need certainty about eventual forgiveness, IBR’s loan forgiveness is the most certain choice, but the payments are higher.

With the SAVE Plan on hold and the legal battle ongoing, you need to take a decisive step. Use the table below to quickly assess the best course of action based on where you stand:

Good news: PSLF is safe. Congress gave the Public Service Loan Forgiveness program a clear green light, so the court ruling doesn’t change your progress.

Once you hit 120 qualifying payments, PSLF forgiveness is still yours. Here’s what this means for your income-driven repayment plan:

• If you’re on ICR, PAYE, or IBR, you’re in the clear. The court only questioned some details about forgiveness for ICR and PAYE, but it didn’t cancel these PSLF-qualifying repayment plans. PSLF only cares that you make your payments.

• If you’re on SAVE, things get murky. The ruling shows SAVE’s forgiveness rules are likely illegal, and there won’t be an automatic switch to another plan. SAVE replaced REPAYE, so if it falls apart, you’ll have to switch plans manually.

• IBR and PAYE come with their own requirements, such as income limits and borrowing history rules. If SAVE gets struck down, double-check that you qualify for any alternative plan before making a move.

Your past payments and credits are secure. The court ruling on SAVE doesn’t undo what you’ve already earned. While nothing is 100% guaranteed, here’s what you can count on:

• Your PSLF certification stays solid. The ruling doesn’t target your already-certified PSLF payments. It only questions SAVE’s future authority.

• Your credits under REPAYE, SAVE, and other IDR plans remain valid. You made those payments legally, which is why borrowers enrolled in the SAVE plan went into administrative forbearance in June 2024.

• If your loans are already forgiven, they stay forgiven. The ruling looks ahead and won’t undo loans that have been forgiven.

If your payment count looks off, act now to protect your progress:

1. Review Your Record: Check your PSLF payment history carefully. If you spot missing credits or an incorrect count, don’t assume they’re lost.

2. File a Reconsideration Request: Use the official PSLF Reconsideration Request portal (not the FSA Ombudsman) to fix any errors.

3. Address Past Delays: If delays during the Trump administration pushed your forgiveness timeline past 10 years, file a request to correct your payment count.

Remember, PSLF still means 120 qualifying payments. Every payment counts, so double-check your records and take action if something’s not right.

Related: Why Your PSLF Payments Are Not Counting

IBR is your safest bet after the recent court ruling. The 8th Circuit specifically pointed to IBR as being distinct from other repayment plans, noting its clear statutory basis.

This makes IBR your most legally secure option for ensuring your payments count toward forgiveness. But, it usually requires paying 15% of your discretionary income instead of the 10% under SAVE.

Related: Can I Change My Repayment Plan for Student Loans

How to Switch Repayment Plans Now

The process has temporarily changed because the FSA’s IDR online application portal has been shut down. You have these options:

• Submit a paper application to your loan servicer

• Upload your application through your servicer’s online portal (if available)

• Fax or mail your application to your servicer

What to expect after submission:

• Your servicer should confirm receipt within a few days

• They should automatically place you into processing forbearance during the review

• Processing takes 2-6 weeks (sometimes longer). From our experience, Nelnet and Aidvantage are processing applications faster, 2 to 3x faster than EdFinancial and MOHELA.

Important forbearance details:

• The first two months of forbearance count toward IDR and PSLF forgiveness

• Additional forbearance beyond two months may not count and could accrue interest

• In practice, paper applications often require explicitly requesting forbearance

• Call your servicer within a week of submission to confirm your forbearance status and avoid missing payments

What If You’re Switching to the Standard Repayment Plan?

Switching from an IDR plan to the 10-Year Standard Repayment Plan follows a different process:

• Your servicer should not place you into a forbearance. The changes should go through automatically.

• If you need PSLF credit, make sure you’re switching to the 10-year standard repayment plan since other standard repayment structures don’t qualify.

Submitting Paper Applications and Wet Signatures

With the shift to paper applications, you may encounter wet signature requirements.

A wet signature means you must sign your name with a pen or apply a realistic digital signature (not just type your name). Some loan servicers require this for verification.

If your application requires a wet signature, make sure to complete it correctly to avoid processing delays. Also, make sure you’re using the latest IDR Request Form.

Need help? Check out these legitimate resources:

• The FSA Information Contact Center at 800-433-3243.

• Your student loan servicer’s official contact line.

• The Education Department’s blog/news page

• Reddit subsections: r/StudentLoans and r/PSLF

• The Institute of Student Loan Advisors

• EdCapNY (if you’re in New York)

• Our extensive student loan blog and news resources

And if you want more personalized help, book a call with our student loan expert. We’ll help you make sense of these SAVE Plan litigation updates and how to minimize the risk of higher monthly payments if you decide to switch plans.

The SAVE Plan litigation updates have raised big questions about repayment and forgiveness, but key protections remain in place. Here’s what you need to know:

• Your forgiveness progress is secure. If you’ve earned PSLF credits or are close to IDR forgiveness, those credits won’t disappear. The ruling affects future policy, not past progress.

• IBR offers stability. If you want the safest path forward, IBR is the best choice. It may come with higher payments, but its forgiveness rules are backed by law.

• You have time to adjust. SAVE borrowers are in interest-free forbearance for six months. Use this time to review your options, but keep in mind that forbearance doesn’t count toward forgiveness.

• Other IDR plans are available. You can still enroll in IBR, PAYE, or ICR. Processing delays are possible, so if you need to switch, start sooner rather than later.

If anything looks off in your payment count, contact the PSLF Reconsideration Team to make sure your progress is properly tracked.

Not sure what your best move is?

Book a call with our student loan expert for clear guidance tailored to your situation.

Related Readings:

• Student Loan Forgiveness Lawsuit Update

• What Happens to Student Loans if the Department of Education is Abolished

• Will Trump Repeal PSLF?