The Trump administration’s dismantling of the SAVE repayment plan has set in motion one of the largest borrower transitions in the history of federal student lending. With a court-approved settlement now officially eliminating the program ahead of its originally scheduled 2028 phase-out, millions of Americans who had relied on the plan’s lower monthly payments are now facing an uncertain path forward, and, according to a recent government report, a system ill-equipped to guide them through it.
The SAVE plan, introduced by former President Biden in 2023, was designed to reduce monthly payments and accelerate the timeline to debt relief. It had been effectively frozen since the summer of 2024 due to ongoing litigation. While Trump’s broader spending legislation had already planned to wind the program down gradually, the new legal settlement accelerates that timeline considerably, leaving borrowers scrambling.
Federal Oversight of Loan Servicers Has Quietly Collapsed
The Government Accountability Office released a report in early March revealing that the Department of Education’s Federal Student Aid office ceased evaluating the five major federal student-loan servicers on accuracy and call quality in February 2025. Without those assessments, the agency has no reliable mechanism to confirm that borrowers are being billed correctly or receiving accurate guidance from the representatives they contact.
According to the GAO report, FSA is “missing opportunities to ensure that servicers are providing borrowers complete and accurate information” at precisely the moment when major statutory changes to repayment options are being implemented.
Richard Lucas, acting chief operating officer of FSA, pushed back on the framing, noting that the agency still uses alternative performance metrics, including surveys that assess servicers across areas such as borrower communications, contact center quality, and website support. Critics, however, say those alternatives are insufficient substitutes.
Borrower Advocates Sound the Alarm Over Compounding Risks
The timing of the GAO findings has drawn sharp criticism from advocacy groups and lawmakers. Aissa Canchola Bañez, policy director at Protect Borrowers, said the report “could not come at a worse time,” pointing out that SAVE borrowers will be forced to transition to new plans with no option but to depend on servicers operating under reduced scrutiny.
The concern is not isolated to SAVE. Federal servicers will also be responsible for implementing new repayment structures from Trump’s spending bill, including a standard repayment plan and a new Repayment Assistance Plan that allows forgiveness after 30 years of payments. Representative Bobby Scott, the top Democrat on the House education committee, described the GAO’s findings as a “flashing red warning sign” about what lies ahead as this overhaul proceeds.
Adding to the complexity, the Department of Education announced on March 19 that defaulted borrowers’ accounts would begin moving to the Treasury Department, part of the administration’s broader effort to restructure the department. According to borrower advocates, the move places millions of accounts at heightened risk of payment errors. The Department of Education has not yet issued formal guidance on when or how SAVE borrowers will be required to make the switch.
