New Yorkers enrolled in the federal SAVE student loan repayment plan are being urged to choose a new repayment option before they are automatically moved into a plan that could carry higher monthly payments.

New York Attorney General Letitia James issued a consumer alert July 6 after loan servicers began notifying borrowers that the Saving on a Valuable Education plan is being terminated.

Borrowers enrolled in SAVE began receiving notices July 1 about selecting a different federal repayment plan. Those who do not choose a new plan within 90 days of receiving a notice will likely be automatically moved to the Standard Plan, according to James' office.

The Standard Plan does not consider income, which means monthly payments are often higher than income-driven repayment options.

The SAVE plan was created in 2023 as an income-driven repayment plan. A federal court ordered the U.S. Department of Education in 2024 to place SAVE borrowers into mandatory forbearance and eventually terminate the plan, according to the attorney general's office.

Borrowers whose most recent loan was disbursed or consolidated before July 1, 2026, may be able to choose options including Income-Based Repayment, Pay as You Earn, Income-Contingent Repayment, the Repayment Assistance Plan or traditional repayment plans. Borrowers on PAYE and ICR plans will have to choose new plans by July 1, 2028.

Borrowers whose most recent loan is disbursed or consolidated on or after July 1, 2026, will have to choose between the Repayment Assistance Plan and the Standard Plan.

New Yorkers can contact the Education Debt Consumer Assistance Program for free guidance by calling 888-614-5004 or emailing edcap@cssny.org.

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Categories: Education New York State News