Move to end SAVE plan for borrowers comes as California student loan delinquencies surge
California's affordability crisis could become even more challenging for people with student debt.
The Trump administration reached an agreement that could end the popular student debt-repayment plan called Saving on a Valuable Education, or SAVE.
Kevin Rivera is a Sacramento State graduate with a bachelor's and master's degree. He just moved back to Southern California for a new job and learned his student loan repayment plan is being canceled.
"It is frustrating," Rivera said. "But now I don't even know what amount I'm going to have to pay. So I feel like that's kind of at the top of my priority list, just figuring out what it is that I have to do."
Rivera is enrolled in the Biden-era student loan repayment plan SAVE, which often calculates lower debt payments based on income levels and family size.
The Department of Education announced its decision to end the SAVE program, pending court approval.
The Trump administration calls the SAVE plan illegal, saying it shifts the college loan debt burden to all taxpayers. Seven million people are enrolled in SAVE nationwide.
Savannah Hastings is a student loan specialist in Sacramento, helping people navigate their student debt.
"[It's] definitely one of the more popular ones," Hastings said. "It calculated your payments at a lower percent of your discretionary income. So for a lot of people, it was just the most affordable option."
According to the California Policy Lab, in California, student loan delinquencies are surging.
The share of borrowers who are 30-plus days late on paying back their loans is now at 11%. That is three times higher than when the pandemic began.
For Rivera, the student loans put him on a course to become the first college graduate in his family. His future includes hopes for law school, and possibly higher debt payments to reach his dreams.
"It is definitely a good chunk of money that is going to be coming out of my paycheck," Rivera said. "I mean, at the end of the day, I knew what I was signing up for, but any assistance is very appreciated, and we had this assistance through the SAVE plan."
The Department of Education says it will be contacting Rivera and the 7 million other SAVE enrollees about other repayment options. Those options will likely all be more expensive.