What SAVE Borrowers Must Consider Before Switching IDR Plans (2025)

🎓 What SAVE Borrowers Must Consider Before Switching IDR Plans (2025)

The SAVE Plan (Saving on a Valuable Education)—launched under the Biden administration—offered generous benefits like lower monthly payments and interest subsidies. However, due to recent legal rulings and upcoming legislative changes, many SAVE borrowers are now weighing a switch to other IDR plans like IBR or PAYE.

Here’s what you need to know before making a move:

⚠️ 1. SAVE Plan Status Is Uncertain

Interest benefits suspended: As of August 1, 2025, courts have blocked SAVE’s 100% interest subsidy for many borrowers. This means interest may now accrue even when monthly payments are $0, making SAVE less attractive.
Future of SAVE in doubt: The new “Big Beautiful Bill” will eliminate SAVE by July 2028. Existing borrowers will be required to move to Income-Based Repayment (IBR) or the new Repayment Assistance Plan (RAP) by that time.

🔁 2. Switching Could Impact Loan Forgiveness Clock

If you switch from SAVE to IBR or another IDR plan, you might reset the clock on your progress toward 20- or 25-year forgiveness unless your payment history is transferred under the IDR Account Adjustment (which ends mid-2025).
Check your qualifying payment count before switching. If you’re close to forgiveness, staying on SAVE—even with less favorable terms—might make more sense.

📉 3. SAVE Still Has the Lowest Monthly Payments

SAVE calculates payments as 5% of discretionary income (for undergrads), compared to:
- 10% under PAYE or IBR,
- 15% under ICR.
If you’re struggling financially, SAVE may still give you the lowest payment, even if the interest benefit has been removed.

🔄 4. You May Lose Access to SAVE’s Interest Subsidy Permanently

Once you switch away from SAVE, you likely cannot return to it—especially after new borrowers are barred from entering after July 1, 2026.
Carefully compare your new plan’s terms (IBR, PAYE, etc.) before making the jump.

👩‍⚕️ 5. Consider Public Service Loan Forgiveness (PSLF)

If you’re working in public service (nonprofits, government), and are pursuing PSLF, ensure your new plan qualifies.
- All IDR plans count, but Standard 10-Year Plan does not.
SAVE, IBR, PAYE, and eventually RAP are all PSLF-eligible—but you must stay enrolled in a qualifying plan consistently.

✅ What Borrowers Should Do in 2025

Log into StudentAid.gov and check your loan status and IDR payment count.
If you’re on SAVE and your interest has started accruing, evaluate your total balance growth.
Use the Loan Simulator tool to compare SAVE, IBR, and RAP (when available).
Avoid hasty switching—especially if you’re within a few years of forgiveness.
Consider switching to IBR if:
- You don’t qualify for SAVE’s reduced payments,
- You’re not pursuing PSLF,
- You expect higher income in the future.
Stay alert for updates to RAP, which begins July 1, 2026 and will replace all IDR plans over time.

🧠 Final Thought

SAVE was one of the most borrower-friendly plans ever introduced—but with courts limiting its benefits and Congress planning its phase-out, borrowers must act carefully. Evaluate your repayment goals: short-term affordability, long-term forgiveness, or loan minimization. A misstep in switching could cost thousands in interest or delay forgiveness.

🏛️ Consider Public Service Loan Forgiveness (PSLF) — 2025 Guide

Public Service Loan Forgiveness (PSLF) is a federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments (10 years) while working full-time for a qualifying employer.

In 2025, with policy changes and new plans like RAP on the horizon, PSLF remains one of the most powerful tools for student loan borrowers working in public service.

✅ Who Qualifies for PSLF?

You must meet all of the following:

Employment: Work full-time for a qualifying public service employer, including:
- Government (local, state, federal, tribal)
- Nonprofit 501(c)(3) organizations
- Certain nonprofit or private service organizations (if work is related to public service)
Loan Type: Only Direct Loans qualify.
- FFEL or Perkins Loans must be consolidated into a Direct Consolidation Loan.
Repayment Plan: Must be enrolled in a qualifying IDR plan, such as:
- SAVE (until it’s phased out)
- IBR
- PAYE
- ICR
- RAP (available July 2026)
Payment Requirements: Make 120 on-time, full, scheduled monthly payments while employed in public service.

🔁 PSLF vs Forgiveness Under IDR

Feature	PSLF	IDR Forgiveness
Forgiveness Timeline	After 10 years (120 payments)	After 20–25 years of payments
Employment Requirement	Public service	Any job
Tax on Forgiven Amount	$0 – Not taxable	May be taxable (after 2025)
Qualifying Repayment Plans	IDR (SAVE, IBR, PAYE, RAP)	Same

🔄 PSLF in 2025: What’s New or Changing?

Transition to RAP (Repayment Assistance Plan)
Starting July 1, 2026, new borrowers will use RAP, which is PSLF-eligible.
If you’re already on SAVE, PAYE, or IBR, you’ll need to choose between staying or transitioning.
IDR Adjustment (Until June 30, 2025)
The IDR account adjustment allows PSLF borrowers to get retroactive credit for qualifying months—even under older or non-qualifying plans.
👉 Act before June 30, 2025, to benefit.
FSA PSLF Help Tool
Use the PSLF Help Tool to verify employment and submit PSLF forms digitally.

🧠 Tips for Maximizing PSLF

Certify employment annually using the PSLF Employment Certification Form.
Stay in a qualifying repayment plan—switching to a non-IDR plan may disqualify payments.
Track your payment count and employment history at StudentAid.gov.
Don’t pause payments unless absolutely necessary—forbearance and deferment typically don’t count toward PSLF (except for COVID-era adjustments).

⚠️ Common Mistakes to Avoid

Being on the wrong repayment plan (e.g., Standard 10-Year Plan with no forgiveness benefit).
Failing to consolidate ineligible loans (like FFEL) into Direct Loans.
Missing annual employment certification updates.
Switching plans that reset payment counts without confirming PSLF eligibility.

📌 Final Thought

PSLF remains a lifeline for public service workers—including teachers, nurses, military personnel, and nonprofit staff. In the shifting loan landscape of 2025, this program is still one of the fastest paths to tax-free student loan forgiveness. Make sure you’re on the right plan and track your progress carefully to maximize your benefit.

What SAVE Borrowers Must Consider Before Switching IDR Plans (2025)