SAVE ended by court order on March 10, 2026, and no one is moved to the new RAP plan automatically. Your servicer will send a notice giving you at least 90 days to choose a plan. Do nothing and you are placed in a Standard plan, which usually costs more and stalls loan forgiveness.
More than 7.5 million borrowers are getting some version of the same email this year, at a pace the Department of Education says will reach 250,000 notices a week. If you are one of them, the anxiety is reasonable and the decision is smaller than it feels. There are really only two plans left to compare, and you can run that comparison in an evening.
| Question | Where it stands |
|---|---|
| Is SAVE gone? | Yes. A court order ended it on March 10, 2026. |
| Is RAP available? | Yes. It opened in the StudentAid.gov application on July 1, 2026. |
| Am I moved to RAP automatically? | No. You must apply, or you default into a Standard plan. |
| What is my deadline? | At least 90 days from your servicer's notice. Notices run July 2026 to March 2027. |
| Is interest accruing? | Yes, since August 1, 2025. |
| Does forbearance time count toward forgiveness? | No. It never did. |
What just changed with SAVE?
A federal court order ended the SAVE plan on March 10, 2026, the last step in a settlement between the Department of Education and the State of Missouri. The borrowers still enrolled are being moved off in waves: servicers began sending notices on July 1, 2026, and each notice starts a clock of at least 90 days.
The waves matter more than any single headline date. Per the Department of Education, notices go out in tranches from July 2026 through March 2027, and no borrower is forced off SAVE before September 29, 2026, which is simply 90 days after the first notices. Your deadline is not a date you can look up in the news. It is printed in your own notice, and until that notice arrives, your job is to be ready for it.
What is the Repayment Assistance Plan (RAP)?
RAP is the new income-driven plan that opened on July 1, 2026. It charges 1 to 10 percent of your adjusted gross income per year, paid monthly, subtracts 50 dollars a month for each dependent, never drops below 10 dollars a month, and forgives whatever remains after 30 years of payments.
It was created by the July 2025 budget law (the One Big Beautiful Bill Act, enacted as the Working Families Tax Cuts Act), and for loans first disbursed on or after July 1, 2026 it is the only income-driven option. Per the Congressional Research Service, the payment percentage rises one point for each 10,000 dollars of AGI:
| Adjusted gross income | Payment rate |
|---|---|
| 10,000 dollars or less | 10 dollars a month, flat |
| 10,001 to 20,000 dollars | 1 percent of AGI a year |
| 40,001 to 50,000 dollars | 4 percent of AGI a year |
| 70,001 to 80,000 dollars | 7 percent of AGI a year |
| 100,001 dollars and up | 10 percent of AGI a year |
Two features soften that bill. If your payment does not cover the month’s interest, RAP waives the unpaid interest instead of letting the balance grow. And if your payment reduces principal by less than 50 dollars, the government matches principal up to 50 dollars a month. Forgiveness after the 30 years is taxable income under current federal law, since the pandemic-era tax exclusion expired at the end of 2025; forgiveness through PSLF at 120 payments stays tax free.
Because the brackets step at each 10,000 dollars of AGI, one extra dollar of income can move you a full percentage point. Pre-tax contributions to a 401(k) or HSA lower AGI directly, so it is worth estimating where you land before you apply. Our salary calculator gives you a quick read on your income picture, and the exact AGI figure comes from line 11 of your most recent tax return.
Will you be moved to RAP automatically?
No. Nothing in this transition happens for you except the part you do not want. If your window closes without an application, the Department of Education enrolls you in the Standard Repayment Plan or the new Tiered Standard plan (it has not said which borrowers get which), and both charge by loan balance rather than income.
That default is the trap in this story. Balance-based payments are often several times an income-driven amount for lower earners, and the defaults are dead weight for forgiveness: Tiered Standard does not qualify for PSLF, and a 10 year Standard plan pays the loan off in exactly the 120 payments PSLF would have needed. The fix is unglamorous: apply yourself, on time, through the income-driven repayment request at StudentAid.gov. While you are in there, you can consent to the IRS data pull, which lets your income recertify automatically each year instead of relying on you to remember a paperwork deadline.
What happens to your interest and forgiveness credit?
Interest has been accruing on SAVE loans since August 1, 2025, and it was not charged retroactively for the year of forbearance before that. It keeps accruing until your new plan application is processed, which is a quiet argument for applying early in your window rather than on day 89.
Forgiveness credit splits cleanly in two. Qualifying payments you made under SAVE before the forbearance still count, and they carry forward into IBR’s 20 or 25 year clock and into RAP’s 360 payment count. Months spent parked in the administrative forbearance count toward nothing, a point the Department of Education’s settlement terms and the nonprofit TISLA both confirm. PSLF borrowers have one narrow recovery tool: buyback, which lets you pay for forbearance months only if you already have 120 months of qualifying employment and the purchase completes your forgiveness. Since March 31, 2026 buyback amounts are priced using the IBR, PAYE, or ICR formulas rather than SAVE’s, which made it a costlier tool than it was.
Should you pick RAP, IBR, or let Standard happen?
For existing borrowers this is really RAP versus IBR, and IBR wins more often. Higher-education analyst Mark Kantrowitz made the case plainly on CNBC in March 2026: forgiveness can come in 20 years under IBR against the 30 year timeline on RAP. PAYE and ICR close to switchers on July 1, 2028, and letting Standard happen by default is the worst of the three for anyone counting on forgiveness.
| RAP | IBR | Standard and Tiered Standard | |
|---|---|---|---|
| Payment based on | 1 to 10 percent of AGI | Discretionary income | Loan balance |
| Lowest payment | 10 dollars a month | 0 dollars | Fixed by balance and term |
| Forgiveness | After 30 years, taxable | After 20 or 25 years, taxable | None; you repay in full |
| Counts toward PSLF | Yes | Yes | Tiered Standard no; 10 year Standard pays off at 120 payments |
| Interest help | Unpaid monthly interest waived, principal match up to 50 dollars | None | None |
| Who can use it | Direct Loan borrowers, no Parent PLUS | Loans from before July 1, 2026 | Anyone; it is the do-nothing default |
One asymmetry deserves bold print. Under the RISE final rule, your old IDR payments count into RAP’s 360, but months paid on RAP do not count toward IBR’s forgiveness. Trying RAP for a year and then switching to IBR costs you that year. Run both numbers first, decide once. And a caution on the exits: refinancing federal loans with a private lender ends access to every plan on this page, including PSLF, permanently.
If you are pursuing PSLF
Move now. IBR and RAP both qualify, and every month spent in the forbearance or in a default Standard plan is a month that does not advance your 120. Certify your employment while you are at it, and keep your own copy of the payment count you are claiming.
If you are close to 20 or 25 year forgiveness
IBR protects the clock you have already built. Switching to RAP would put your finish line at 360 total payments, so a borrower 18 years into IDR could trade 2 remaining years for 12. Check your payment count on StudentAid.gov before touching anything, and remember that forgiveness reached in 2026 or later is federally taxable outside PSLF.
If you cannot afford a payment right now
IBR can calculate to 0 dollars at low income, and the 2025 law removed the old hardship test that used to keep some borrowers out. RAP’s floor is 10 dollars a month. Both beat staying parked: forbearance now means growing interest and zero forgiveness credit. If the real problem is a lost job, size the whole picture first with the layoff runway calculator so the loan decision sits inside an honest budget.
What does doing nothing actually cost?
Landing in a balance-based plan changes the arithmetic of the whole loan, so here is the arithmetic. We ran the student loan payoff calculator engine on its default scenario: a 38,000 dollar balance, near the US average federal balance, at 6.5 percent.
| Fixed monthly payment | Time to payoff | Total interest |
|---|---|---|
| 432 dollars (10 year Standard pace) | 120 months | 13,752.82 dollars |
| 432 dollars plus 150 extra | 81 months | 9,020.74 dollars |
| 250 dollars | 321 months (almost 27 years) | 42,223.75 dollars |
Read the last row first. A 250 dollar payment happens to be what RAP’s 5 percent bracket works out to on a 60,000 dollar AGI with no dependents, and held fixed it stretches this loan to 321 months and 42,223.75 dollars of interest, three times the interest of the Standard pace. That is the honest trade inside every low-payment plan: relief now, more months and more interest later, with forgiveness as the backstop only if you stay the full course. A real RAP payment would move with your income each year and waive any unpaid interest, which this fixed-payment engine deliberately does not model, so treat the row as the shape of the tradeoff. Our RAP calculator models the plan’s actual mechanics, the interest waiver and the 50 dollar principal match, from just your AGI and dependents, and your official estimate lives in ED’s Repayment Calculator in your StudentAid.gov account, the replacement for the retired Loan Simulator.
The middle row is the opposite lever. If you are not chasing forgiveness, 150 extra dollars a month on the Standard pace clears the loan 39 months sooner and saves 4,732.08 dollars of interest. Assumptions, stated plainly: fixed rate, fixed payment, monthly accrual on the outstanding balance, no fees, no plan changes. Change any of those and the figures move, which is exactly what the calculator is for.
What if you have Parent PLUS, FFEL, or a spouse with income?
Parent PLUS is the hard case. Those loans, and any consolidation containing one, are never eligible for RAP, and new consolidations no longer open an income-driven path for them. If you consolidated earlier and sit on an income-based plan today, your best move is to confirm your standing with your servicer in writing and avoid changes you cannot undo.
FFEL and Perkins loans need a Direct Consolidation Loan before any of the plans above apply, and consolidating can reset forgiveness progress, so ask your servicer what happens to your count before you sign. Timing cuts the other way too: a consolidation disbursed on or after July 1, 2026 restricts you to RAP or Tiered Standard only.
Married and filing separately? RAP reads only your own AGI in that case, which can shrink the payment when your spouse out-earns you. The tax cost of filing separately is its own calculation, and the only deduction RAP adds back is the 50 dollars per dependent, so run both filings side by side before choosing.
What should you check and ask this week?
At StudentAid.gov, before your notice arrives:
- Your current plan and loan types, under Loan Details. FFEL, Perkins, and Parent PLUS change the whole menu.
- Your PSLF and IDR payment counts, screenshotted for your records.
- Your contact information, so the notice actually reaches you.
- Autopay: the Department of Education is raising the autopay interest rate reduction to 1 percent from July 1, 2026 through June 30, 2028 for borrowers enrolled by September 30, 2026, and SAVE borrowers need to pick a legal plan first to capture it. After June 30, 2028 the discount reverts to the standard 0.25 percent autopay reduction, per EdFinancial’s borrower notice.
On the phone with your servicer, get four things in writing: the exact date your 90 day window ends, your recorded payment counts, when your forbearance actually stops, and your first due date on the new plan. Servicer wave schedules differ; EdFinancial says it will notify its SAVE borrowers between July 1 and August 15, 2026, each with 90 days from the notification send date, while Nelnet has said its 3 million borrowers will hear between July 2026 and March 2027.
What is still unclear?
Honesty about the moving parts, as of July 5, 2026:
- A lawsuit is testing the transition itself. In Havens v. US Department of Education, borrowers have asked a federal court in Washington, DC to halt the forced moves off SAVE, with a hearing expected the week of July 13, 2026. No order has changed the timeline so far. If a ruling lands, StudentAid.gov’s court actions page is where the official version appears.
- Which default plan you would get. The Department of Education says non-responders are placed in “the Standard Repayment Plan, or the new Tiered Standard Plan” without saying which borrowers get which. Plan to apply so it never matters.
- What happens to waived interest if you later leave RAP. The capitalization treatment is not yet confirmed in published guidance. If you expect to switch plans someday, ask your servicer for their current answer in writing.
- Your own dates. Everything here is wave-based. The only deadline that binds you is the one in your notice.
Your next step
Log into StudentAid.gov today and answer two questions: what loans do you actually have, and has your notice already been sent. Then compare your IBR and RAP payments with ED’s Repayment Calculator in your account, and if you want to see what any fixed payment does to your total interest, run it through the student loan payoff calculator. Ninety days is plenty of time for a decision this size, but only if the clock starts with you already knowing your numbers.
This is educational information, not legal, tax, or financial advice. Federal student loan rules are changing quickly; verify your dates, payments, and options at StudentAid.gov and with your loan servicer before acting.