Key Points
- The latest court filing in the SAVE lawsuit offered no new direction, leaving millions of borrowers in forbearance without a repayment date.
- Congress has already ended the SAVE plan, but the transition is still in the works and no official timeline has been announced.
- A separate backlog of more than 27,000 student loan complaints is growing after major staffing cuts at the Department of Education.
The week began with anticipation for the August 4 court status report in the lawsuit over the SAVE repayment plan. Borrowers hoping for clarity instead saw a short update from the parties indicating that discussions continue, with no agreed-upon timeline for next steps.
The SAVE plan, designed to lower monthly payments for millions of federal student loan borrowers, has been blocked by court order since 2024. Under the injunction, the Department of Education cannot resume payments under the plan, leaving roughly 7 to 8 million borrowers in administrative forbearance. Interest on these loans resumed August 1, but no payments are due.
Congress officially ended SAVE as part of the One Big Beautiful Bill Act, signed into law in July, which also created a new Repayment Assistance Plan (RAP) scheduled to begin July 1, 2026. Borrowers currently in SAVE are expected to move to an amended version of Income-Based Repayment (IBR) sometime between now and June 30, 2028, but the exact timing is still unknown.
The next court update is scheduled for October 3. Until then, borrowers remain in a holding pattern, relying on estimated timelines rather than official announcements.
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What The Timeline Looks Like For SAVE Plan Borrowers
The Department of Education has told borrowers they will remain in forbearance through at least November 2025. While technically possible for repayment to resume in December 2025, doing so would require moving millions of borrowers into another repayment plan, sending notices, updating loan servicer systems, and possibly reopening application periods.
Given the operational challenges and the existing backlog of repayment plan applications, our opinion is that a mid-2026 restart is more likely. This would align with the launch of RAP and allow the department to coordinate communications and system updates in one large transition rather than two.
Under that scenario, SAVE borrowers would automatically migrate to amended IBR after July 2026. Those who prefer RAP could then enroll when it goes live. ICR and PAYE are set to end for borrowers by June 2028, and our sources at the loan servicers estimate they will close enrollment in these plans in 2027 to allow time for the transition to take place.
Complaint Backlog Adds To Student Loan Issues
While the SAVE issue dominates headlines, a separate development this week raised new concerns for borrowers seeking help with existing problems. Data sent to Sen. Elizabeth Warren showed the Federal Student Aid ombudsman office now has more than 27,000 unresolved complaints.
The backlog has grown sharply since March, when widespread layoffs at the Department of Education cut the ombudsman staff from 63 to 25 employees. The office, which investigates disputes over loan servicing, repayment errors, and alleged scams, continues to receive hundreds of new cases each week. In May, it closed just over 1,100 complaints, far fewer than the number coming in.
Borrowers waiting on complaint resolutions may face months-long delays, leaving errors uncorrected. For those seeking Public Service Loan Forgiveness (PSLF) buyback, the department is already taking 8 to 9 months to process cases.
The department has defended the staff reductions as part of an effort to streamline operations, but there is major concern that the loss of investigative capacity makes it harder to identify and fix widespread student loan issues.
Challenges Ahead
The end of SAVE and the student loan complaint backlog highlight the scale of administrative work facing the Department of Education in the coming months. The agency must implement provisions of the OBBBA, process millions of repayment plan changes, and address an existing queue of borrower disputes...all with reduced staffing.
Borrowers in SAVE should watch for official updates later this year. Remember, until the forbearance officially ends with guidance from the Department of Education, the dates listed in your loan servicer portal are simply placeholders and will change.
Those with pending complaints should prepare for extended waits and consider following up regularly with both their servicer and the ombudsman’s office.
With the next SAVE court update not due until October, the coming weeks are likely to remain quiet on repayment timelines. But behind the scenes, the department will need to decide how to sequence the end of SAVE, the start of RAP, and the processing of thousands of unresolved borrower issues.
Editor: Colin Graves
Robert Farrington is the founder of The College Investor and is widely recognized as one of the nation’s leading voices on student loan debt and saving for college. He holds an MBA from UC San Diego Rady School of Management and has spent over 15 years researching, writing, and advising on student loans, 529 plans, financial aid programs, and saving and investing for young professionals.
Robert has been featured in the The New York Times, The Wall Street Journal, The Washington Post, NBC News, and Forbes, where he has been a regular personal finance contributor for over a decade. His work combines both professional expertise and personal experience – he successfully navigated his own student loan repayment journey and has helped thousands of readers do the same.
He is committed to making the intersection of personal finance and education transparent and accessible. You can learn more about Robert on the About Page or on his personal site RobertFarrington.com.