(WNY News Now) – New York Attorney General Letitia James is encouraging federal student loan borrowers enrolled in the Saving on a Valuable Education (SAVE) plan to review their repayment options after the program’s termination process officially began on July 1, 2026.

Attorney General Letitia James has issued a consumer alert advising New Yorkers with federal student loans to prepare for the end of the SAVE repayment plan by selecting a new repayment option within 90 days of receiving a notice from their loan servicer.

Beginning July 1, 2026, loan servicers started notifying borrowers that the SAVE plan forbearance is ending. Borrowers who do not choose a new repayment plan within 90 days will likely be automatically enrolled in the Standard Repayment Plan, which typically requires higher monthly payments because it does not base payments on income.

The SAVE plan, introduced in 2023 as an income-driven repayment option, was placed into mandatory forbearance following a federal court order in 2024. The federal government later announced plans to phase out the program, leading to the current transition.

Depending on when their federal loans were disbursed or consolidated, eligible borrowers may have several repayment options, including Income-Based Repayment (IBR), Pay as You Earn (PAYE), Income-Contingent Repayment (ICR), the new Repayment Assistance Plan (RAP), or traditional repayment plans such as Standard, Graduated, and Extended plans. Borrowers with loans first disbursed or consolidated on or after July 1, 2026, generally will be limited to RAP or the Standard Plan.

James urged borrowers to review their choices carefully to avoid being placed in a repayment plan that may not fit their financial circumstances.

New Yorkers seeking free guidance on federal student loan repayment options can contact the Education Debt Consumer Assistance Program (EDCAP) for personalized assistance. Additional information about the SAVE plan transition and student lending resources is also available through the New York State Office of the Attorney General.