Dottie Orzechowski has never known adulthood without student loan payments. After working as a health and physical education teacher at a public school, she returned to college to earn additional degrees in hopes of increasing her pay and job security. She borrowed $117,000 from the federal government to fund her education, earning a master's and doctorate degree, and paid between $400 and $600 monthly on an income-driven repayment plan. Despite those payments, her balance grew to $215,000 due to accruing interest.

In 2023, Orzechowski enrolled in Saving on A Valuable Education (SAVE), a Biden-era repayment plan with generous terms designed to help struggling borrowers make affordable payments. As the plan faced legal challenges in federal court, she and millions of other Americans were placed into legally mandated administrative forbearance, during which SAVE borrowers had years of $0 payments.

Nearly two years after Republican attorneys general challenged SAVE in federal court, an appeals court officially ended the rule creating the plan in March 2025. The U.S. Department of Education subsequently informed SAVE enrollees they would have 90 days from July 1 to select a new repayment plan or be transferred into a standard repayment plan—a prospect advocates say would be unaffordable for most borrowers.

"It's been over 20 years, and you would never know that I made a payment at all," Orzechowski said. "Like many people in America right now, my budget is hanging on by a thread. And if I get one more payment thrown on top of it, or one more bill that goes up on top of it, the whole house of cards is going to come tumbling down."

What the Right Is Saying

Conservative critics have long argued that generous repayment plans and loan forgiveness programs shift costs to taxpayers and remove personal accountability from borrowers who chose their educational paths. The legal challenge to SAVE was led by Republican attorneys general who successfully argued the Biden administration overstepped its authority in creating the plan without congressional approval.

Republicans maintain that income-driven repayment options remain available, including the new Repayment Assistance Plan launching July 1 alongside three other existing plans. They argue these alternatives provide sufficient flexibility for borrowers experiencing genuine hardship while preserving the principle that federal loans must eventually be repaid.

Critics from the right have also raised concerns about the fiscal implications of expansive student loan programs. The Congressional Budget Office estimates the cost of various repayment and forgiveness initiatives, and conservative lawmakers have pushed for reforms that tie repayment terms more closely to congressional appropriations rather than executive branch discretion.

Some Republican policymakers have proposed structural changes to the federal student loan system, including caps on borrowing amounts and greater scrutiny of degree programs with poor career outcomes. They argue these measures would better address the root causes of debt accumulation rather than repeatedly restructuring existing loans.

What the Left Is Saying

Progressive advocates and Democratic policymakers argue that the elimination of SAVE leaves millions of borrowers facing unsustainable costs without adequate support from the Education Department. They point to the plan's design—which featured low or no monthly payments, an interest subsidy preventing balance growth, and faster forgiveness for smaller loans—as a necessary intervention for workers struggling with stagnant wages amid rising costs.

Michele Zampini, associate vice president of federal policy and advocacy at The Institute for College Access and Success, which helped craft SAVE, said the plan gave borrowers who were behind the opportunity to re-enter the system with affordable payments. "And then," she said, "it all kind of came crashing down."

Advocates argue that borrowers need clear pathways to affordable repayment options as they exit forbearance. Lesley Turner, associate professor of public policy at the University of Chicago, said now is the time to ensure borrowers receive targeted information and that new plan implementation needs stress-testing. Progressives have called for additional funding for the Education Department's borrower services to handle the anticipated surge in applications.

Winston Berkman-Breen, legal director at Protect Borrowers, noted that transferring borrowers to standard repayment would be unaffordable "almost by definition" for someone who was on SAVE. He warned of a potential flood of applications: "So what's going to happen when 7 million people suddenly, in a three-month period, file an application?"

What the Numbers Show

Federal student loan data reveals a system returning to pre-pandemic stress levels after three years of payment suspension. Before 2020, approximately 1 million student loans went into default annually. The COVID-19 pandemic pause eliminated virtually all federal loan delinquency and default for more than three years.

As of December 2025, 7.7 million borrowers had loans in default—a figure the Education Department notes matches pre-pandemic levels. This marks the first opportunity for non-SAVE borrowers to default since payments resumed in late 2023, given that federal student loans require 270 days of non-payment before entering default status.

More concerning to some analysts is the rise in serious delinquencies among borrowers still technically in repayment status. Federal data show approximately 16% of borrowers in repayment are now seriously delinquent—more than 90 days late—compared with roughly 10% in the final pre-pandemic quarter. This figure excludes those who have already defaulted.

The Education Department's processing backlog is substantial: nearly 554,000 applications for income-driven repayment plans were outstanding at the end of March, according to court-mandated status reports filed as part of litigation by the American Federation of Teachers against the department.

Young workers face particular challenges. Unemployment among recent college graduates and other young workers has risen steadily following pandemic-era lows, according to data from the New York Federal Reserve. This complicates repayment for newer borrowers who entered the workforce during a tighter labor market than currently exists.

The Bottom Line

The ending of the SAVE plan leaves 7 million borrowers facing higher monthly payments at a time when many are already stretched financially. With borrowers required to select new repayment plans by October 1 or be transferred to standard repayment, advocates warn that confusion and processing delays could push financially vulnerable households into delinquency and eventual default.

Borrowers have several options available, including the new Repayment Assistance Plan launching July 1 alongside three other income-driven plans. However, in nearly every case, payments will exceed what borrowers paid under SAVE's more generous terms. The Education Department, which has reduced its workforce over the past year, faces the task of processing millions of applications while maintaining services for tens of millions of other borrowers.

Experts suggest that borrowers contact their loan servicers immediately to explore options and certify their income before payments restart. Those who cannot afford proposed payment amounts may qualify for lower payments based on documented hardship, but only if their applications are processed in time. Whether the system can handle the anticipated volume without a significant increase in defaults remains to be seen—something experts say they hope they're wrong about.

"I hate to say it, I really hope I'm wrong," Zampini said. "But just based on everything we've seen and everything we know... all signs are pointing toward worse default rates than ever."