SAVE Is Ending: What Student Loan Borrowers Should Do in 2026
Updated June 2026 · ~6 min read
If you were enrolled in the SAVE plan, change is coming. SAVE is being eliminated, and a new income-driven repayment plan — the Repayment Assistance Plan (RAP) — becomes available July 1, 2026. Millions of borrowers now have to choose a new plan. This guide explains your options in plain English and how to decide.
Want your specific number first? Estimate your new payment with our free RAP calculator, then read on for the trade-offs.
What is happening to SAVE?
SAVE (the Saving on a Valuable Education plan) is being phased out under the 2025 One Big Beautiful Bill Act. Borrowers who do not actively choose a new plan risk being moved to a default option with a higher payment, so taking action is better than waiting.
Your main options in 2026
1. The new Repayment Assistance Plan (RAP)
RAP is the headline replacement. Your monthly payment is a percentage of your adjusted gross income (AGI) on a sliding scale from 1% to 10%, divided by 12, minus $50 for each dependent, with a $10 minimum. Two features stand out:
- No negative amortization: the government waives unpaid interest each month you pay, so your balance will not grow while enrolled.
- $50 principal match: if your payment covers less than $50 of principal, the government adds up to $50 toward it.
- Forgiveness of any remaining balance after 30 years (360 payments).
2. Income-Based Repayment (IBR)
IBR remains available. Payments are generally 10–15% of discretionary income, with forgiveness after 20–25 years. For some borrowers — particularly those pursuing Public Service Loan Forgiveness (PSLF) or with specific income profiles — IBR may still be the better fit.
3. The standard plan
A fixed payment over a set term. Predictable, but usually a higher monthly payment than income-driven options and no forgiveness component.
RAP vs IBR: how to think about it
There is no universal winner. A few rules of thumb:
- Lower income relative to your balance? RAP's percentage-of-AGI formula and interest waiver often produce a low, predictable payment and protect you from a ballooning balance.
- Have dependents? RAP's flat $50-per-dependent reduction is simple and can meaningfully cut your payment.
- Pursuing PSLF? Confirm how each plan's payments count toward forgiveness before switching, since timeline and qualifying-payment rules matter.
- Higher income? Compare the RAP percentage against IBR's discretionary-income formula — at higher incomes the two can diverge significantly.
The fastest way to compare is to run your AGI through the RAP calculator and weigh that payment against your current or projected IBR payment.
A simple action plan
- Find your AGI and dependent count. Your most recent tax return has both.
- Estimate your RAP payment. Use the calculator to see your monthly number and 30-year picture.
- Check PSLF status. If you are working toward public-service forgiveness, verify that your chosen plan keeps your qualifying payments on track.
- Make an active choice. Contact your loan servicer to enroll rather than letting a default plan be assigned to you.
- Re-certify income annually. Income-driven payments recalculate each year, so keep your information current.
Key dates
- July 1, 2026: RAP becomes available for eligible Direct Loan borrowers.
- Ongoing through 2026–2028: SAVE is wound down; borrowers are expected to transition to a new plan.
Because exact transition deadlines and servicer processes can change, confirm your timeline directly at StudentAid.gov or with your servicer.
Disclaimer: This article is educational and not financial advice. Servicer implementation and final regulations may differ. Confirm your options at StudentAid.gov.