Education Department directs student loan borrowers in SAVE plan to prepare for repayment

WASHINGTON (AP) — More than 7 million student loan borrowers who have been enrolled in a Biden-era repayment plan will receive notices beginning Friday with instructions to seek a new plan to repay their debt, the Education Department said.

Borrowers enrolled in the SAVE plan, which was struck down by a federal court earlier this month, have been in forbearance since July 2024 as a legal battle played out in courts. Starting July 1, loan servicers will begin issuing notices giving borrowers 90 days to select a new repayment plan.

The available repayment plans will mean higher monthly payments for most of those borrowers.

When Alexis Arredondo graduated from the University of California, Los Angeles, in 2024 with a degree in microbiology, he struggled to find full-time work in research or public health. Instead, he began working part-time and freelancing for nonprofits in Southern California.

A first-generation college student, he took on roughly $40,000 in student debt and enrolled in the SAVE plan upon graduation. Now, he said, he has to choose between paying more per month...