2023–2024: The SAVE Plan Launches, Then Faces Challenges
The Biden administration introduced the Saving on a Valuable Education (SAVE) plan as a replacement for REPAYE in 2023. SAVE featured lower monthly payments and a more aggressive forgiveness schedule than prior IDR plans. Enrollment reached approximately 7.2 million borrowers by late 2025.
In 2024, multiple states filed legal challenges to the SAVE plan, arguing that the administration had exceeded its statutory authority in designing the program. Federal courts agreed to hear the cases. While litigation was pending, the Department of Education placed SAVE-enrolled borrowers in administrative forbearance.
2025: Courts Strike Down SAVE, Forbearance Extends
Federal courts ruled against the SAVE plan in 2025, finding that key provisions exceeded the Department of Education's authority under the Higher Education Act. The plan was struck down. Enrolled borrowers remained in administrative forbearance while the Department determined a transition path.
The administrative forbearance that began during litigation extended for nearly two years total. Any months spent in this forbearance do not count toward IDR forgiveness timelines, regardless of any payments made voluntarily during that period.
⚠ Forbearance Credit
July 1, 2026: The OBBBA Takes Effect
The One Big Beautiful Bill Act goes into effect for new borrowers on July 1, 2026. The key student lending changes are the elimination of Grad PLUS loans and the capping of Parent PLUS at $20,000 per year and $65,000 lifetime.
Graduate students who begin their programs in the 2026-2027 academic year and beyond will not have access to Grad PLUS. They must cover costs above the $20,500 Direct Unsubsidized cap through private financing, institutional aid, or other means.
What Borrowers and Families Should Do Now
Students starting or continuing graduate programs in fall 2026 should model their financing needs now, before July 1. If your program costs exceed $20,500 per year and you were planning to use Grad PLUS, you need a private loan strategy in place before your enrollment date.
Parents who planned to use Parent PLUS above $20,000 per year need to identify supplemental financing sources before the academic year begins.
Current SAVE borrowers who are exiting forbearance should contact their servicer to confirm which IDR plan they will be transitioned to and verify that their qualifying payment count is accurate.
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Get Notified at Launch →Frequently Asked Questions
What student loan changes happen on July 1, 2026?
On July 1, 2026, the One Big Beautiful Bill Act takes effect for new borrowers. Grad PLUS loans are eliminated, Parent PLUS loans are capped at $20,000 per year and $65,000 lifetime, and the student loan landscape changes significantly for graduate students and families.
What happened to the SAVE plan?
The SAVE income-driven repayment plan was struck down by federal courts. Borrowers who were enrolled were placed in administrative forbearance for nearly two years while litigation proceeded. The plan has now been officially eliminated and borrowers must transition to another eligible repayment plan.
LoanAmerica is not a lender and does not make credit decisions. All loans will be underwritten, approved, and funded by a participating lending partner bank. Loan products are not yet available. Information on this site is for general informational purposes only and does not constitute an offer to lend, a solicitation, or a commitment to provide financing. When available, loans will be subject to credit approval, school eligibility, enrollment verification, and program qualification. The 72-hour funding window is a target timeline, is not guaranteed, and may vary. This content does not constitute legal, financial, or tax advice. For information about existing federal student loans, contact your servicer or visit studentaid.gov.