SAVE Plan Ending: Repayment Assistance Plan Explained

The SAVE plan is over, and about 7.5 million borrowers now have to pick a new one. Servicers are sending 90-day notices in waves; if you do nothing before your notice expires, you are moved to a Standard or Tiered Standard plan, where the payment ignores your income and Tiered Standard earns no PSLF credit. The one action to take this week: log in at studentaid.gov, run the Loan Simulator, and submit an application for either the new Repayment Assistance Plan (RAP) or Income-Based Repayment (IBR).

Key takeaways

• SAVE ended under a court settlement. The Education Department says 7.5 million borrowers were enrolled.
• Notices started July 1, 2026. Your clock is 90 days from the date on your own notice, and the earliest anyone is forced off is September 29, 2026.
• Do nothing and you land on the Standard or Tiered Standard plan. Tiered Standard payments do not count for Public Service Loan Forgiveness.
• RAP charges 1% to 10% of adjusted gross income, minus $50 per dependent, with a $10 floor and unpaid interest waived on on-time payments.
• Interest has been accruing on SAVE forbearance since August 1, 2025, and forbearance months do not count toward forgiveness.

This is general information, not financial advice. Your servicer and studentaid.gov have your actual numbers.

What happened to the SAVE plan?

SAVE (Saving on a Valuable Education) was the Biden-era income-driven plan. Missouri and other states sued in 2024, arguing it went beyond the Education Secretary’s authority. Courts blocked parts of it, and borrowers were parked in a forbearance starting in July 2024. The Department then agreed to end the plan to settle the lawsuit, and the court entered its judgment on March 10, 2026.

On March 27, 2026, the Department announced the next steps. It calls SAVE “unlawful” and says it would have cost more than $342 billion over ten years. Supporters of the plan disagree with that framing. I am not going to referee that here. What matters for you is the mechanics: SAVE is closed, and you need a new plan.

Two things about the forbearance matter. First, interest started accruing again on August 1, 2025, so balances have been growing for a year. Second, those forbearance months do not count toward PSLF or income-driven forgiveness. Those months added nothing to your count.

Repayment Assistance Plan (RAP) explained

The Repayment Assistance Plan was created by the One Big Beautiful Bill Act (Public Law 119-21) and opened on July 1, 2026. It replaces the alphabet soup of older income-driven plans for new borrowers, and it is open to existing Direct Loan borrowers who want to move in. Here is how the payment works.

• Payment basis: a percentage of your adjusted gross income (AGI), not “discretionary” income. The rate starts at 1% for AGI between $10,001 and $20,000 and rises one point per $10,000 band, up to 10% at $100,001 and above.
• Floor: if AGI is $10,000 or less, you pay $120 a year, which is $10 a month. The minimum for anyone is $10.
• Dependents: subtract $50 a month for each dependent claimed on your tax return.
• Interest: if your on-time payment does not cover the month’s interest, the unpaid interest is waived, not added to your balance.
• Principal match: if an on-time payment cuts principal by less than $50, the Department adds up to $50 so principal drops by at least $50 a month.
• Forgiveness: after 360 qualifying monthly payments, which is 30 years. PSLF still forgives at 10 years.
• Not for Parent PLUS: Massachusetts’ student loan office notes RAP is not available for Parent PLUS debt.

The 30-year term is the sting. Old IBR forgives at 20 or 25 years. RAP’s trade is a lower payment for many people, a real interest waiver, and a much longer road to forgiveness.

RAP vs the other plans

Here is the field as of late August 2026. PAYE and ICR are still open to existing borrowers but close on July 1, 2028, so I have left them out. IBR comes in two versions depending on when you first borrowed.

Two details on the table. IBR no longer requires you to prove a “partial financial hardship,” which used to lock some people out. And the Tiered Standard terms are set by balance: under $25,000 gets 10 years, $25,000 to $49,999 gets 15, $50,000 to $99,999 gets 20, and $100,000 or more gets 25.

Your deadline and what happens if you do nothing

There is no single national deadline. Servicers began emailing notices on July 1, 2026, and each notice starts its own 90-day clock. The Department told the court that no borrower would be forced off SAVE before September 29, 2026, and that most people would get more time because notices go out in batches.

Servicers describe the batches differently. MOHELA’s FAQ says its notices go out in waves from July through October 2026. The College Investor reports that Nelnet told borrowers to expect notices between July 2026 and March 2027. Either way, the safe assumption is this: if you have not seen a notice, check your servicer inbox and your email spam folder, and act anyway. MOHELA says plainly that you do not have to wait for the notice.

The notice itself says: “If you’re currently enrolled in the SAVE Plan but don’t submit a new application for a different repayment plan within 90 days, you will be placed on the Standard Repayment Plan.” The Department’s press release and MOHELA add that it is either the Standard plan or the new Tiered Standard plan, depending on when your loans were disbursed. Both are fixed-payment plans. Neither caps the payment at what you earn, and the Tiered Standard plan does not count toward PSLF.

One more group: people who applied for SAVE but were never enrolled. Servicers are now denying those pending applications. If you do nothing, you go back to whatever plan you were on before you applied, according to the servicer notices The College Investor reviewed.

One bonus with a deadline: the Department is offering a 1% interest-rate reduction for autopay on loans made after July 1, 2012, and NerdWallet reports September 30, 2026 as the enrollment deadline. Check the terms with your servicer before you count on it.

How to pick a plan: a worked example

Take a single borrower with $40,000 in Direct Loans and $55,000 in AGI. I will assume a 6.5% interest rate so the arithmetic is concrete. Your rate will differ; use the Loan Simulator at studentaid.gov for your own numbers.

RAP. $55,000 falls in the $50,001 to $60,000 band, which is 5% of AGI. That is $2,750 a year, or about $229 a month. With one dependent, subtract $50: about $179. Monthly interest on $40,000 at 6.5% is roughly $217. A $229 payment covers that and knocks about $12 off principal, so the government’s match adds up to $38 more to reach the $50 floor. At $179, the payment does not cover interest, so the unpaid $38 is waived and principal still drops $50 through the match. The balance never grows on RAP.

Tiered Standard. $40,000 sits in the $25,000 to $49,999 tier, so 15 years of fixed payments. At 6.5%, that is about $348 a month. No forgiveness, no PSLF credit, but the loan is gone in 15 years.

New IBR. 10% of discretionary income, which is AGI minus 150% of the poverty line for your household size. The result is usually in the same neighborhood as RAP for a single earner at this income, with forgiveness at 20 years instead of 30. The Loan Simulator will show the exact figure because the poverty line updates every year.

How I would decide. If the fixed payment fits, the fixed plan costs the least over time, and it ends. If it does not fit, I would pick the income-driven plan with the lower payment and put the difference against the balance whenever I could. Cash freed up by canceling the subscriptions you forgot about is a fair place to start. If forgiveness is the goal, the 20-year IBR clock beats RAP’s 30, so the payment gap has to be worth ten extra years.

How to switch, step by step

1. Log in at studentaid.gov. Confirm your servicer, your balance, and your interest rates on the dashboard. If your email or address is stale, fix it so the notice reaches you.
2. Run the Loan Simulator. It shows a monthly payment and total cost for each plan you qualify for, using your real loans.
3. Apply at studentaid.gov/idr. One application covers RAP, IBR, PAYE, and ICR. If you want a Standard or Tiered Standard plan instead, contact your servicer directly.
4. Give IRS consent. The notice says allowing the IRS to share your tax data speeds up processing. Do that rather than uploading pay stubs if you can.
5. Save the confirmation. Screenshot the submission page and note the date. Your 90-day clock is about submitting the application, not about the servicer finishing it.
6. Watch your account. Servicers say they process requests in the order received. TISLA said in March that plans were moving “fairly quickly”; NerdWallet notes that a PSLF Buyback backlog has already caused significant processing delays, so expect the system to be busy. If nothing changes in a few weeks, call.
7. Set up autopay once the new plan is live, and check the first bill against the Simulator estimate.

Ignore anyone charging a fee to “help” you switch. The application is free, and the notice itself warns about scams.

If you’re going for PSLF

If I had a PSLF clock running, I would not let the 90 days expire. Standard and Tiered Standard are the fallback plans, and Tiered Standard payments do not count toward PSLF, not even in the 10-year tier. That is the trap for public servants: a year of payments that earn zero credit.

RAP and IBR both count. One change from the new law: payments under RAP and other income-driven plans must now be made on time to count toward PSLF, according to Massachusetts’ summary of the plan. The SAVE forbearance months do not count, which is why TISLA points to PSLF buyback as the fix. Buyback lets you pay for those months later. TISLA also says buyback requests are taking over a year, so file early and keep records of your employment.

Between the two counting plans, I would lean toward whichever gives the lower payment. For PSLF, the finish line is 120 qualifying payments either way, so a smaller payment means less money spent before forgiveness. For more on managing debt and bills, see our Money section.

FAQ

Is the SAVE plan ending for good?

Yes. The Department agreed to end it in a settlement with Missouri and other states, and the court entered judgment on March 10, 2026. It is closed to everyone, including people with pending applications.

When do SAVE plan payments start again?

Once you are placed on a new plan. That is 90 days after your notice at the latest, and no one is forced off before September 29, 2026. If you apply sooner, your first bill on the new plan comes sooner.

What is the RAP student loan plan minimum payment?

$10 a month. Borrowers with AGI of $10,000 or less pay $120 a year, and the $50-per-dependent reduction cannot push anyone below $10.

Should I switch from SAVE to IBR or RAP?

Run both in the Loan Simulator. IBR forgives at 20 or 25 years; RAP at 30 but with a stronger interest waiver and often a lower payment. New borrowers after July 1, 2026 cannot use IBR, and any new loan you take after that date is limited to RAP or Tiered Standard, even if your older loans stay on IBR.

Does the SAVE forbearance count toward forgiveness?

No. TISLA and NerdWallet both confirm the forbearance months do not count toward PSLF or income-driven forgiveness. PSLF borrowers can use buyback to recover them.

The bottom line

Do not wait for the letter. Log in, run the Simulator, and submit an IDR application this week, because the default plan is the one most people want least.

Sources

• U.S. Department of Education, March 27, 2026 – 7.5 million borrowers, July 1 notices, 90-day window, default to Standard or Tiered Standard, $342 billion estimate
• U.S. Department of Education fact sheet, June 9, 2026 – RAP 1% to 10% of income, $50 per dependent, interest waiver, $50 principal match, 360 payments, July 1, 2028 decision date
• TISLA SAVE litigation FAQ – March 10, 2026 judgment, interest accruing since August 1, 2025, forbearance does not count, PAYE/ICR end July 2028, processing speed, buyback timing
• National Consumer Law Center (SLBA) – settlement with Missouri, auto-reassignment if no action, apply at studentaid.gov
• MOHELA SAVE FAQ – notices in waves July to October 2026, 90 days from notice date, no need to wait, order-received processing
• The College Investor – notice wording, email delivery, Nelnet July 2026 to March 2027 window, IRS consent, scam warning
• The College Investor – pending SAVE applications denied, revert to prior plan
• Student Loan Planner – “no borrower will be required to move off the SAVE Plan until September 29, 2026 at the earliest”
• Student Loan Planner – RAP income bands, $10 floor, 30-year forgiveness
• Massachusetts Office of Student Financial Assistance – $10 minimum, Parent PLUS excluded, on-time payments for PSLF
• NerdWallet – lawsuit history, forbearance since 2024, interest since August 2025, autopay 1% discount and September 30, 2026 deadline, backlog warning
• Saving for College – SAVE plan terms (5% of discretionary income for undergraduate loans, 10% for graduate)
• NerdWallet – old vs new IBR terms, hardship test removed, Tiered Standard tiers and $50 minimum, PSLF eligibility by plan
• NerdWallet – 7.5 million borrowers, forbearance since July 2024, TICAS advice
• Tate Law – Tiered Standard payments do not count for PSLF in any tier