Student-loan borrowers get notices saying they have 30 more days to pick a new repayment plan

Some student-loan borrowers are receiving final notices to choose a new repayment plan or face being placed in the most costly option. The Department of Education informs borrowers they have an additional 30 days to make a selection. The deadline for transitioning off the SAVE repayment plan, introduced during the Biden administration, was September 29.

However, some borrowers who failed to choose a new plan within the 90-day window may receive more time. A spokesperson confirms that borrowers who received their initial SAVE notice on or around July 1 have now been given a final 30-day window to pick a new plan, without disclosing the precise number of affected borrowers. If borrowers do not select a new plan within this period, their accounts will be automatically switched to the standard or tiered repayment plan, which carries higher monthly payments.

The 90-day timeframe to transition off SAVE began following the Trump administration's removal of the plan, which led to the issuance of notices on July 1. Borrowers have reported confusion over conflicting deadlines and inaccurate information on their online accounts. Since the repayment plan overhaul, borrowers have faced issues such as incorrect billing, unclear account statuses, and difficulties in understanding customer service responses.

These complications have made it challenging for borrowers to manage their finances and avoid the potentially severe consequences of default, including wage garnishment and the loss of federal benefits. Notices to leave SAVE have been sent in multiple waves, and it remains uncertain if every borrower will receive a 30-day final notice after their initial 90-day deadline.

Additionally, the Department of Education recently extended the deadline to enroll in automatic payments to the end of December, providing borrowers with an extra month to receive a one-percentage-point reduction in their interest rate.