Student Loan Borrowers Face September 29 Deadline

July 20, 2026

More than 7 million federal student loan borrowers must transition from the eliminated SAVE repayment plan to one of two new options by September 29th. The Repayment Assistance Plan bases payments on income and dependents, while the Tiered Standard Repayment plan offers fixed terms ranging from 10 to 25 years depending on total debt. Consumer advocates warn these changes will increase financial hardship for borrowers, as the new plans typically result in higher monthly payments than SAVE provided and come amid ongoing problems with loan servicers who have repeatedly mishandled borrower accounts.

Who is affected

More than 7 million borrowers who were enrolled in the SAVE repayment plan
Student loan borrowers with modest incomes or long repayment histories
Borrowers with smaller original loan balances who previously qualified for quicker forgiveness
45 percent of all student loan borrowers who have experienced credit distress over the past five years
Borrowers managing multiple debt obligations with limited savings and cash flow

What action is being taken

Borrowers are transitioning from the SAVE plan to new repayment options
Student loan servicers are processing enrollment changes
Borrowers are completing new enrollment by the September 29 deadline
Pending SAVE applications are being denied
Borrowers continue to default on their loans (every nine seconds in 2025, according to the report)

Why it matters

The elimination of SAVE and transition to new repayment plans significantly impacts borrowers' financial stability by typically increasing monthly payment amounts compared to what they paid under SAVE. This change occurs during a time when nearly half of all student loan borrowers already face credit distress, making it harder for them to pursue long-term financial goals. The situation is compounded by systemic failures in student loan servicing, where companies paid over a billion dollars annually have repeatedly provided wrong information, charged illegal fees, and wrongly rejected applications. These policy changes threaten to worsen an already fragile situation for millions of Americans carrying student debt, potentially pushing more borrowers into default and further financial hardship.

What's next

Borrowers must choose between the Repayment Assistance Plan or Tiered Standard Repayment plan by September 29
Monthly payments will begin according to the terms of the chosen plan once enrollment is complete
Borrowers who fail to choose by the deadline will be automatically placed in a standard repayment plan
Advocates are calling for lawmakers and regulators at every level to step up and protect borrowers by reining in loan servicers

Read full article from source: The San Diego Voice & Viewpoint