Nearly 7 Million Borrowers Still Stuck in a Student Loan Plan Courts Killed. The Clock Is Running.

The Numbers

Nearly 7 million federal student loan borrowers are still enrolled in the Saving on a Valuable Education plan — better known as SAVE — even though courts have ruled it dead.

Nicholas Kent, the undersecretary of education at the U.S. Department of Education, told CNBC on Thursday that only around 300,000 borrowers have exited SAVE in recent weeks. That leaves roughly 6.7 million people sitting in a plan that no longer legally exists, with their loan balances growing and their progress toward forgiveness frozen.

"It's a problem for borrowers," Kent said. "They're not recognizing the benefit of making their payments."

How We Got Here

The Biden administration launched SAVE in 2023, marketing it as "the most affordable repayment plan ever created." For many borrowers, it cut monthly payments in half. Republican-led legal challenges hit it almost immediately.

By July 2024, millions of enrollees were placed in a payment forbearance while litigation played out. That pause meant no monthly bills, but also no progress toward loan forgiveness and no interest being paid down in any meaningful way. A federal appeals court ordered SAVE formally wound down earlier this year.

The Trump administration kept the payment pause in place for a period after that ruling. In late March, the Education Department announced that SAVE enrollees would get roughly 90 days from July 1 to exit and select a new repayment option.

The math: the first borrowers to receive servicer notices this summer will face deadlines in the fall. Because servicers are staggering notices to avoid a processing bottleneck, Kent told CNBC that those deadlines will arrive on different dates for different borrowers throughout the summer.

What Borrowers Risk

Borrowers who do nothing face two near-term problems. First, once SAVE officially disappears and they haven't selected an alternative, they could be billed under a standard repayment schedule — which for many would mean payments far higher than what SAVE promised. Second, if they can't afford those payments and don't act, they slide toward delinquency and eventually default.

Over 42 million Americans carry federal student loan debt totaling more than $1.6 trillion, according to the Congressional Research Service. The 7 million still in SAVE represent roughly one in six of those borrowers.

The Strongest Case for Letting Borrowers Stay Put

Some borrower advocates argue the real problem here isn't borrower inaction. It's the legal and administrative chaos that created this situation. SAVE was a lawfully promulgated federal rule that borrowers enrolled in good faith. Courts blocked it during litigation; the administration froze payments; borrowers who stopped paying were following official instructions. Penalizing them now for staying in a program the government told them was valid is a legitimate grievance, not laziness or gaming the system.

That concern deserves a direct answer. Kent's warning is that staying in SAVE longer actually hurts borrowers because time in forbearance doesn't count toward income-driven repayment forgiveness timelines. Whether the government will offer retroactive credit for those frozen months — or some other bridge — remains an unresolved question the Education Department has not publicly answered.

The Servicer Problem

Kent's explanation for why deadlines are being staggered, rather than announced uniformly, is practical. Flood all 7 million borrowers with notices at once and student loan servicers will be crushed under the volume. The staggered rollout makes operational sense. It also means borrowers have no way to know, right now, exactly when their personal deadline hits without waiting to hear from their servicer.

That's a real accountability gap. A borrower who doesn't open their servicer's email or misses a mailed notice could blow through their 90-day window without realizing it started.

What Borrowers Should Do Now

Kent's message to CNBC was unambiguous: "SAVE borrowers have to move." The available alternatives include other income-driven repayment plans such as Income-Based Repayment (IBR) and Pay As You Earn (PAYE), as well as standard and graduated repayment options. Borrowers can compare plans at studentaid.gov and, in many cases, enroll directly through their loan servicer.

The Education Department's guidance says the 90-day window begins when a borrower receives notice from their servicer — not on a fixed universal date. That distinction matters enormously for anyone who assumes July 1 is their personal start date. It may not be.

The Open Question

The Education Department has not publicly said whether months spent in SAVE forbearance — from July 2024 through the eventual shutdown — will count toward income-driven repayment forgiveness timelines. For borrowers chasing Public Service Loan Forgiveness or a 20-year IDR discharge, that answer could be worth tens of thousands of dollars. Kent's CNBC interview did not address it.