More than seven million borrowers may soon see their student loan payments skyrocket as the Education Department implements a settlement agreement that ends the SAVE plan.

Last month, the Trump administration entered into a settlement agreement with the state of Missouri and other GOP-led states that had brought a legal challenge over the SAVE plan, a Biden-era repayment program that offered reduced payments and fast-tracked student loan forgiveness. That settlement is still pending court approval, but once it is finalized, millions of borrowers with student loans enrolled in SAVE who have been in a no-payment forbearance for more than a year will likely be forced back into repayment.

While borrowers may have options to keep their payments manageable, they will have a limited time to act. And payments on student loans will almost universally be higher under other repayment plans compared to what they were under SAVE. Here’s the latest, and what student loan borrowers need to know.

The Education Department’s settlement agreement with the state of Missouri would effectively end the SAVE plan, once it is approved by court (and the court is expected to approve it).

"The Department will not permit anyone else to enroll in SAVE (or the plan that SAVE replaced, called REPAYE), and it will deny any pending applications for SAVE," under the terms of the settlement, explained the National Consumer Law Center in a blog post last month. “The Department will work to move borrowers already enrolled in SAVE out of SAVE and into a different repayment plan. The Department will not forgive any loans through the SAVE Plan (or through the plan that SAVE replaced, called REPAYE). The Department will not implement any provisions of the 2023 repayment rules that created the SAVE plan with one exception: it will implement a provision that allows certain types of deferments and forbearances to count as qualifying time toward loan........

© Forbes