Why millions of student-loan borrowers kicked off Biden's key repayment plan face even more hurdles

• A federal watchdog reported diminished oversight over federal student-loan servicers.
• It comes as millions of student-loan borrowers on SAVE will soon have to transition to a new plan.
• Lack of oversight could put those borrowers at risk of billing and account errors.

The student-loan repayment roller coaster keeps rolling.

Over 7 million borrowers who were enrolled in former President Joe Biden's SAVE student-loan repayment plan will soon have to transfer to a new plan after a court approved President Donald Trump's legal settlement to eliminate SAVE.

While the Department of Education has not yet released its guidance on next steps for SAVE borrowers, the transition is set to be a major operational task for federal student-loan servicers. That could be a problem given diminished servicer oversight, a recent report from the Government Accountability Office said.

In addition to the lack of oversight, the Department of Education announced on March 19 that it would begin moving defaulted student-loan borrowers' accounts to the Treasury Department in a new partnership — part of the Trump administration's broader goal to dismantle the Department of Education. Borrower advocates said the move could put millions of accounts at risk of payment errors.

The GAO's report, released in early March, found that the department's Federal Student Aid office stopped assessing the five major federal student-loan servicers on accuracy and call quality in February 2025. The lack of oversight leaves FSA without assurance that servicers are billing borrowers correctly and providing them with accurate information.

"FSA is missing opportunities to ensure that servicers are providing borrowers complete and accurate information as it implements major statutory changes to student loan repayment options affecting millions of borrowers," the report said. Advocates pointed to the elimination of SAVE as a reason the discontinued oversight could harm borrowers.

Aissa Canchola Bañez, policy director at advocacy group Protect Borrowers, said in a statement that the GAO's report "could not come at a worse time, as millions of SAVE borrowers will be forced out of their repayment plan and have no other choice but to rely on their servicer to maintain access to an affordable repayment option."

The SAVE plan, introduced by Biden in 2023, intended to give borrowers cheaper monthly payments with a shorter timeline to debt relief. It's been blocked since the summer of 2024 due to litigation. While Trump's "big beautiful" spending legislation planned to phase out SAVE by 2028, the approved settlement eliminates it ahead of schedule.

It's not only SAVE borrowers — federal servicers will have to oversee the creation of new repayment plans from Trump's spending bill. It includes a standard repayment plan and a new Repayment Assistance Plan, which would allow for forgiveness after 30 years of payments. Rep. Bobby Scott, top Democrat on the House education committee, said in a statement that the GAO report should serve as a "flashing red warning sign about what is to come" as the administration implements the federal repayment overhaul with diminished servicer oversight.

Richard Lucas, acting chief operating officer of FSA, said that the agency has other metrics it uses to evaluate servicer performance, including through surveys that "score the servicers' performance across five measures each for borrower communications, contact center, and website support, as well as six measures for the servicers' management of loans."

It's unclear how soon SAVE borrowers will be required to transition to a new plan and likely face higher monthly payments. The settlement said that the Department of Education would not enroll any new borrowers in SAVE and would deny all pending applications while it moves forward with the repayment changes.

Have a story to share? Contact this reporter at asheffey@businessinsider.com.