As of July 28, 2026, millions of student loan borrowers are opening the same email: your SAVE plan is ending, and you have 90 days to pick a new repayment plan. Servicers began sending these notices around July 1, and they are landing in waves - covering the roughly 7.5 million borrowers still parked in SAVE, most of them in a court-ordered forbearance (a pause with no required payment).
The deadline is personal: your 90-day clock starts with your own notice, not your friend’s. Here is what it means, how the new plans work, and how to choose.
Why SAVE is ending
Federal courts blocked SAVE - the Eighth Circuit Court of Appeals enjoined the entire plan in February 2025, and the Department agreed in a December 2025 settlement to wind it down rather than defend it. Congress then rewrote the repayment menu in the July 2025 budget law (Public Law 119-21, widely known as the One Big Beautiful Bill Act), which created the Repayment Assistance Plan (RAP) and a new Tiered Standard plan, both live since July 1, 2026.
The timeline, and what happens if you do nothing
Three dates matter.
Your notice date + 90 days. The Department’s March 27, 2026 announcement is blunt: borrowers who do not switch plans within the 90-day window communicated by their servicer “will be automatically enrolled into either the Standard Repayment Plan, or the new Tiered Standard Plan.” Neither looks at your income: they set a fixed payment that clears your balance over 10 to 25 years (Tiered Standard terms depend on balance - 10 years under $25,000, up to 25 years at $100,000 or more), often far higher than an income-based payment.
August 1, 2025 (already passed). Interest has been accruing on SAVE forbearance balances since that date. Waiting is no longer free.
July 1, 2028. The law repeals the old income-contingent repayment authority then: PAYE and ICR sunset, and holdouts are placed into RAP (or IBR if their loans do not qualify for RAP). PAYE today is a bridge, not a destination.
Also: time in the SAVE litigation forbearance generally does not count toward loan forgiveness. The Department has told borrowers pursuing Public Service Loan Forgiveness they must leave SAVE “to start making qualifying payments.”
How RAP calculates your payment
RAP is the new income-based option, with an unusual formula: a flat percentage of your total adjusted gross income (AGI - your income after certain deductions, line 11 on your tax return), not just income above a protected amount. The percentage depends on your AGI band:
| Adjusted gross income | Annual base payment |
|---|---|
| $10,000 or less | $120 |
| Over $10,000 up to $20,000 | 1% of AGI |
| Over $20,000 up to $30,000 | 2% of AGI |
| Over $30,000 up to $40,000 | 3% of AGI |
| Over $40,000 up to $50,000 | 4% of AGI |
| Over $50,000 up to $60,000 | 5% of AGI |
| Over $60,000 up to $70,000 | 6% of AGI |
| Over $70,000 up to $80,000 | 7% of AGI |
| Over $80,000 up to $90,000 | 8% of AGI |
| Over $90,000 up to $100,000 | 9% of AGI |
| Over $100,000 | 10% of AGI |
Divide the annual base by 12, then subtract $50 per month for each dependent you claim on your tax return. The minimum payment is $10 a month - RAP never goes to $0.
Worked example. Say your AGI is exactly $60,000 and you claim 1 dependent child. Assumptions: single filer, income verified from your latest return, no deferment.
- $60,000 falls in the “over $50,000 up to $60,000” band, so the base is 5% of AGI: $3,000 per year.
- $3,000 divided by 12 = $250 per month.
- Subtract $50 for 1 dependent: $250 - $50 = $200 per month.
Watch the bracket cliff: the percentage applies to your whole AGI, not just the amount inside a band. At $60,001 the base jumps to 6%, so the same borrower would pay about $250 - a $1 raise costs roughly $50 more per month. Near a band edge, anything that lowers AGI (like 401(k) contributions) matters more than usual.
Three RAP features are written into the statute:
- Interest waiver. If your on-time payment does not cover that month’s interest, the unpaid interest is not charged.
- Principal match. If your on-time payment cuts principal by less than $50, the government tops up the reduction, up to $50 a month.
- Forgiveness at 360 qualifying payments (30 years), with prior on-time payments under older plans counting toward the total.
Income is re-checked annually, via automatic IRS data sharing you can opt out of.
RAP vs staying on IBR
IBR (Income-Based Repayment) is the main survivor among the older income-driven plans, and the law removed its old hardship entry test. The honest comparison:
| RAP | IBR | |
|---|---|---|
| Payment | 1% to 10% of total AGI, minus $50 per dependent | 10% of income above 150% of the poverty line (first loan July 2014 to June 2026), or 15% (older loans) |
| Lowest payment | $10 per month, always | $0 if income is below the protected amount |
| Forgiveness | After 360 qualifying payments (30 years) | After 20 years (10% version) or 25 years (15% version) |
| Unpaid interest | Waived, plus up to $50 per month principal match | Keeps accruing; balance can grow |
Same borrower ($60,000 AGI, 1 dependent, family of 2): IBR protects 150% of the 2026 poverty guideline for a family of 2 ($21,640), or $32,460. That leaves $27,540, so the 10% version costs about $229.50 per month and the 15% version about $344.25. RAP’s $200 wins on monthly cost here.
But cheaper per month is not automatically better. Deep into an IBR forgiveness clock - say 15 years - staying put could mean forgiveness in 5 to 10 years versus RAP’s 30-year horizon; a lower payment is a bad trade for a decade of extra payments. At very low incomes, IBR’s $0 payment beats RAP’s $10 minimum and still counts toward forgiveness. For PSLF, IBR qualifies by statute; the Department has indicated RAP payments count too, but confirm that on StudentAid.gov before you rely on it.
One eligibility note: Parent PLUS loans and consolidation loans that repaid them generally cannot use RAP.
Your 90-day checklist
- Find your notice and write down the deadline. It comes from your servicer, usually by email - check spam, then confirm the closing date in your servicer account.
- Inventory your loans at StudentAid.gov. Loan types decide your options - Parent PLUS borrowers and some consolidation loans face different rules.
- Run your numbers. Use the table above for RAP, then cross-check every option with the Department’s Loan Simulator, using the AGI from your latest tax return.
- Check your forgiveness clock. Count your qualifying payments so far. The closer you are to IBR’s 20 or 25 years, the more valuable staying on IBR becomes.
- Fit the payment into your real budget. Start from your actual take-home pay - our salary calculator shows it for every state - and slot the payment into a 50/30/20 budget. A required payment also raises your debt-to-income ratio, which matters if a mortgage is in your plans.
- Apply early, not on day 85. Millions of applications are moving through the system; keep your confirmation. If your new payment lands lower than you budgeted, send the difference at your highest-rate debt (our debt payoff calculator shows the fastest order) or build a starter emergency fund.
FAQ
What happens if I completely ignore the notice?
After your 90-day window closes, the Department says you will be auto-enrolled in the Standard Plan or the new Tiered Standard Plan. Your payment will be based on your balance, not your income, so it can jump sharply. You can generally still apply for an income-based plan afterward, but expect weeks of processing with the higher bill in the meantime.
Will I be put into RAP automatically?
Not in this 90-day window - the announced auto-enrollment target is a Standard plan. The automatic move into RAP is the law’s July 1, 2028 backstop: borrowers still in an old income-contingent plan (like PAYE or ICR) who never choose get placed into RAP then, or into IBR if their loans do not qualify.
Do payments I already made count toward RAP forgiveness?
Yes. The law’s definition of a qualifying payment counts on-time payments made under earlier plans - standard, IBR, and the old income-contingent plans - toward RAP’s 360-payment forgiveness. Months spent in the SAVE litigation forbearance generally do not count.
When do PAYE and ICR disappear?
July 1, 2028. The law repeals their authority that day and remaining borrowers are moved as described above.
Sources
- ED press release: Next Steps for Borrowers Enrolled in the Unlawful SAVE Plan - March 27, 2026
- Public Law 119-21, Sec. 82001 (Loan Repayment), full text at govinfo - enacted July 4, 2025
- ED Fact Sheet: Simplifying Student Loan Repayment - June 9, 2026
- ED press release: Improving Federal Student Loan Repayment Options (interest resumes August 1, 2025) - July 9, 2025
- ED press release: Agreement with Missouri to End the SAVE Plan - December 9, 2025
- HHS ASPE: 2026 Poverty Guidelines - published January 2026
- 20 U.S.C. 1098e (Income-Based Repayment statute) at govinfo - 2023 edition, as amended by P.L. 119-21
