Major Student Loan Deadline Passes: What to Do if You Missed It - Newsweek

A major student loan deadline has passed for some borrowers enrolled in the defunct Saving on a Valuable Education (SAVE) repayment plan.

The initial group of affected borrowers faced an October 29 deadline to select an alternative repayment plan following transition notices issued on July 1. Borrowers who missed the deadline face automatic enrollment in the Standard Repayment Plan or the new Tiered Standard Plan, depending on their loan structure. However, experts emphasize that options remain available to mitigate potential fallout.

“Anyone who missed the deadline needs to act immediately by contacting their loan servicer, applying for an eligible income-driven repayment plan, and requesting a temporary processing forbearance if necessary,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “Failing to move quickly could result in even more issues that could damage their credit scores.”

The October 29 deadline did not apply universally. Because loan servicers have distributed transition notices in waves, individual deadlines vary among borrowers, even those utilizing the same servicer.

Millions of Americans have been forced to reconsider how they repay their federal student loans after the SAVE plan ended following a March court order. The U.S. Department of Education (ED) said in March that guidance would go to 7.5 million SAVE borrowers and that servicers would begin issuing individualized transition notices starting July 1.

The ED says borrowers who do not choose another repayment plan by their deadline will be enrolled in a fixed-payment plan. Depending on a borrower's loans, that can mean the Standard Repayment Plan or Tiered Standard Plan. Monthly payments under those plans are frequently higher than under an income-driven repayment plan, so missing the deadline can have considerable financial consequences.

The ED initially told SAVE borrowers they would have at least 90 days after receiving their servicer notice to choose another repayment plan. Servicers began sending those notices July 1.

For the earliest group, however, an additional "final" notice effectively gave borrowers another 30 days to take action, pushing their deadline to October 29.

“If they fail to act, they will be automatically placed into a Standard or Tiered Standard repayment plan, which could result in significantly higher monthly payments and potentially impact their path toward loan forgiveness,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek.

Missing the deadline does not mean borrowers have permanently lost access to an income-driven repayment option.

Borrowers can still apply for an alternative income-driven repayment plan after the deadline has passed. A borrower also will not suddenly owe the new Standard-plan payment the day after the deadline as the ED said a loan servicer will provide the new monthly payment amount at least 21 days before the first payment under the new plan is due.

For someone who has missed their deadline, the first steps are to check their loan-servicer account and StudentAid.gov account, determine which repayment plan they have been placed into, compare available repayment options and submit an application for the plan that fits their situation.

“The biggest concern is that borrowers who fail to choose another repayment plan could automatically be placed into a standard repayment option with significantly higher monthly payments, potentially creating a heavier financial burden for many already facing numerous other costs affected by ongoing inflationary pressures,” Beene said.

Borrowers waiting for an income-driven repayment application to be processed may also have another option. They can contact their servicer about requesting a processing forbearance, which can postpone payments for up to 60 days while the application is reviewed.

Borrowers enrolled in automatic payments should also pay attention to the amount their servicer plans to withdraw. If a borrower's payment increases after being moved to the Standard or Tiered Standard plan, the automatic withdrawal also increases.

The repayment option available to an individual borrower depends on factors including their loan type and when the loans were taken out.

The department's transition guidance points borrowers toward other repayment options, including the new Repayment Assistance Plan, or RAP, which became available July 1.

Federal Student Aid recommends that borrowers use its Repayment Calculator to determine their eligibility and compare estimated payments before selecting another plan.

October 29 was only the first deadline in a much longer transition away from SAVE.

Servicers began sending notices July 1 and have continued notifying borrowers in groups, so affected borrowers are on different timelines. Even borrowers with the same servicer could have different deadlines.

“Depending on when you receive your 90-day notice, if you miss the initial window, you will be given a final 30-day notice to respond,” Thompson said. “If you miss that deadline as well, you will be shifted into a fixed repayment structure that could be much more expensive. My advice is to evaluate your options before the deadline rather than allowing the government to make that decision for you.”

Those who haven't yet reached their deadline also do not have to wait to act. Borrowers can select another repayment plan before receiving their 90-day notice.

SAVE borrowers should continue watching for communications from their loan servicer as the transition continues through the end of 2026.

Those who already missed their deadline should check whether their loans have been placed into the Standard or Tiered Standard plan and review the resulting payment amount to investigate whether another available repayment plan better fits their income and financial situation.

Contact Newsweek editors for this story: Jason Lemon and Anthony Murray.