Student-loan borrowers face an approaching cutoff to choose a different repayment plan after a 30-day reprieve

• The first deadline for student-loan borrowers to exit SAVE is approaching in early November.

• The cutoff comes after borrowers were given an extra 30 days to pick a new repayment plan.

• The department said borrowers who do not choose a new plan will be moved into a standard or tiered plan.

Student-loan borrowers are nearing the first cutoff to move away from a major repayment plan.

Borrowers enrolled in SAVE, the Biden-era plan that lowered monthly payments, began receiving notices after the administration ended the program and gave them 90 days to switch to another option.

That initially put the first group of borrowers on track to face a deadline at the end of September. They later received a final notice granting 30 more days to choose a new plan or be automatically moved into a standard or tiered repayment plan, which are among the most expensive options.

With that extension, November 1 is expected to be the first deadline at which borrowers could be involuntarily shifted to a pricier plan.

An Education Department spokesperson confirmed to Business Insider that nearly 2 million borrowers, out of 7.5 million on SAVE, have already selected a new plan.

“Borrowers who have not switched plans should take immediate action by visiting StudentAid.gov and selecting a new repayment plan today,” the spokesperson said, adding no details on how quickly borrowers would be placed into a standard plan.

Other borrowers have been receiving final notices in waves through different federal servicers. The Education Department has recommended its new Repayment Assistance Plan, an income-driven option that took effect in July. Borrowers who have enrolled in the plan in recent months say it is less generous than SAVE, with some seeing their payments rise by hundreds of dollars.

The transition away from SAVE, and the higher payments that may follow, comes as student-loan defaults are at record levels. Recent Federal Student Aid data showed that 9.3 million borrowers are in default, with another 1.3 million expected to default over the next six months. Borrowers facing larger bills say they fear the fallout from default, including wage garnishment and the seizure of federal benefits such as Social Security.

“When I saw how much the payment is expected to be, I freaked out for a whole week,” said Cristian Barcenas, a borrower moving off SAVE. “I, under no circumstances, want to default.”

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