What's next for the 7 million student-loan borrowers who are losing their affordable repayment plan

• The 8th Circuit called for the approval of Trump's settlement to end the SAVE student-loan repayment plan.
• The Education Department said enrolled borrowers will soon get guidance on switching to a new plan.
• Borrowers will likely face higher monthly payments without SAVE.

Repayment for millions of student-loan borrowers could soon look very different.

In recent days, a series of court decisions sealed the fate of the SAVE student-loan repayment plan, which has been up in the air for years.

The 8th Circuit ordered a district court to approve President Donald Trump's proposed settlement with the state of Missouri to eliminate the plan ahead of its 2028 phaseout.

This means that once the settlement is formally approved in court, the Department of Education can proceed with eliminating the SAVE plan and transitioning borrowers to new plans that are likely to result in higher monthly payments.

"In the coming weeks, the Department will issue clear guidance on next steps for borrowers enrolled in the illegal SAVE Plan, including details regarding how borrowers can move into a legal repayment plan," Undersecretary of Education Nicholas Kent told Business Insider in a statement. "The Trump Administration will continue to realign the federal student loan portfolio to better serve students and taxpayers."

The SAVE plan was created by former President Joe Biden in 2023, intended to give borrowers cheaper monthly payments with a shorter timeline to debt relief. The plan has been blocked since the summer of 2024 due to litigation filed by GOP-led states, including Missouri. Prior to the settlement, Trump's "big beautiful" spending legislation called for eliminating the plan by the summer of 2028.

What's next for SAVE student-loan borrowers

Before the proposed settlement was announced in December, the Department of Education resumed charging interest on SAVE borrowers' accounts on August 1, 2025, and encouraged borrowers to switch to new plans — such as the income-based repayment plan — due to ongoing litigation.

While it's unclear how soon the department will require SAVE borrowers to switch to a new plan in light of the latest ruling, the terms of the proposed settlement offer some detail on what could come next. According to the department, once the settlement is approved, it will not enroll any new borrowers in SAVE, it will deny pending SAVE applications, and it will move all SAVE borrowers to existing repayment plans.

The department advised borrowers to use Federal Student Aid's Loan Simulator to estimate what their monthly payments would look like on a new plan. Borrowers have previously told Business Insider that their projected payments are hundreds of dollars higher than what they owed on the SAVE plan, and they're concerned about their ability to afford the new payments in addition to their other monthly expenses.

David Chatman, a 51-year-old borrower on SAVE, said that his $86 payment is projected to jump to $689.

"When I saw that my payment was going to be this much more, I just sat there and looked at it," Chatman said. "There's no way. There's no way."

For now, enrolled borrowers await further guidance from the Department of Education once the settlement is implemented. Advocates criticized the decision and its impact on millions of borrowers.

"The millions of borrowers who had a right to lower monthly student loan payments and relief through SAVE will now face thousands of dollars in higher bills every year, thanks to the right-wing campaign against borrowers," Winston Berkman-Breen, legal director at advocacy group Protect Borrowers, said. "Nearly 8 million people will see their costs climb, even as voters across party lines beg Trump to do something about America's affordability crisis."

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