As SAVE Winds Down, Borrowers Face a Tipping Point

As 2025 comes to a close, the federal student loan landscape is entering one of its most consequential transitions since repayment resumed. The formal wind-down of the SAVE repayment plan, combined with rising delinquency and a major expansion of Income-Based Repayment (IBR), has put millions of borrowers at a crossroads. 

This moment isn’t just about policy changes, it’s about whether borrowers can adapt in time to avoid unnecessary financial harm. 

Millions Will Need a New Repayment Plan 

With the Department of Education formally announcing the end of the SAVE repayment plan, an estimated 7+ million borrowers will be required to transition to a new repayment option. For many, SAVE had become a default strategy, valued for its low payments and interest protections. 

Now, those borrowers must actively choose what comes next. 

For borrowers who don’t take action, the alternative may be a return to fixed repayment plans that are misaligned with their income, budget, or forgiveness goals. 

Interest Accrual Is Quietly Reshaping Balances 

While much of the focus has been on monthly payments, interest continues to accrue every month for borrowers not covered by interest-subsidy protections. 

On average: 

• Borrowers with balances in the $30,000–$60,000 range accrue hundreds of dollars in interest monthly 

• For higher balances or longer timelines, interest can add thousands to total repayment over time 

As borrowers exit SAVE, understanding how interest behaves under replacement plans like IBR becomes critical, particularly for those deciding between affordability now and long-term cost. 

Delinquency and Default Are Rising...and the Window Is Narrow 

At the same time this transition is taking place, delinquency and default are trending upward nationally.  

More borrowers are: 

• Falling behind after repayment resumed 

• Entering delinquency after a single missed payment 

• Approaching default without understanding options to prevent it 

Once a borrower reaches default, the consequences intensify, including credit damage, collection activity, and fewer proactive options. This makes early plan review and adjustment far more impactful than reactive fixes later. 

The Real Risk: Doing Nothing 

Perhaps the biggest risk in this moment isn’t choosing the “wrong” plan — it’s choosing no plan at all. 

Borrowers who assume servicers will automatically transition them into the best option may face: 

• Higher monthly payments than necessary 

• Lost forgiveness progress 

• Increased interest accumulation 

• Greater risk of delinquency or default 

As the repayment system simplifies, the responsibility on borrowers to actively choose increases. 

Strategy Beats Guesswork 

The takeaway from this transition is not that every borrower should enroll in IBR, but that more borrowers should reassess their assumptions. 

The borrowers best positioned for success in 2026 will be those who: 

• Review their full loan portfolio (not just monthly payment) 

• Compare repayment plans based on forgiveness timelines and total cost 

• Adjust strategies as income and policies change 

  
  

Student loans no longer reward autopilot. They reward strategy. 

What Borrowers Should Do Now 

• Review repayment options in light of SAVE ending 

• Re-evaluate IBR eligibility under expanded rules 

• Address delinquency early before default limits options 

• Seek clarity before switching plans based on headlines 

  
  

In periods of major change, informed decisions matter more than fast ones. Log into Student Debt Solutions to review your full repayment picture and build a plan that supports your long-term goals.