The SAVE Plan Is Ending: What 7.5 Million Borrowers Should Do Now
The short answer
The SAVE plan is ending, and its 7.5 million borrowers get 90 days from their servicer notice to pick a new plan. The real options are RAP, Tiered Standard, and IBR, and the right pick depends on your income path and your balance.
The SAVE plan is ending, and if your federal student loans were on it, your repayment is about to change whether you act or not. In June 2026, a federal court approved a settlement between the Department of Education and the State of Missouri terminating the SAVE plan (the settlement had been announced in December 2025), and the Department directed the plan's roughly 7.5 million borrowers to exit into a lawful repayment plan. Starting July 1, 2026, loan servicers began notifying SAVE borrowers in waves: from the date of your notice, you get 90 days to choose a new plan, and if you don't choose, one gets chosen for you.
Updated September 2026. This is educational information, not financial advice. Confirm everything with your loan servicer and studentaid.gov, the details below reflect publicly announced policy as of this writing.
This article covers what actually happened, your real options, and a framework for picking between them, plus what to do if your 90 days already ran out.
Why the SAVE plan is ending
SAVE (Saving on a Valuable Education), launched in 2023, was the most generous income-driven repayment plan ever offered: payments were based on income, and unpaid monthly interest was subsidized so balances couldn't grow. Republican-led states sued, arguing the Department lacked authority for it, the 8th Circuit held the plan unlawful (Missouri v. Biden, 112 F.4th 531 (8th Cir. 2024)), and the June 2026 court-approved settlement ended it outright. The Department's announcement to borrowers lays out what happens next.
The practical consequences, per the Department of Education:
- No new SAVE enrollments. Pending SAVE applications are being denied.
- Existing SAVE borrowers get 90 days from the date of their servicer's notice
to select a lawful repayment plan. Notices went out in waves starting July 1, 2026, so your deadline depends on when your notice arrived, not on July 1.
- Do nothing and you're auto-enrolled, moved into either the Standard Repayment
Plan or the new Tiered Standard Plan. Auto-enrollment is the worst way to choose, because neither default considers your income.
If you're on PAYE or ICR instead of SAVE, your window is longer, until July 1, 2028, but the destination menu is the same.
What are your three real options?
As of July 1, 2026, two brand-new plans launched alongside the surviving legacy option. Each one, plainly:
1. Repayment Assistance Plan (RAP), the new income-driven plan. Payments run 1%–10% of your adjusted gross income depending on income level, minus $50 per dependent (with a $10 monthly floor). Borrowers who make full on-time payments get unpaid interest waived and a matching principal payment of up to $50, so balances actually shrink, and remaining balances are forgiven after 30 years (360 on-time payments). This is the plan designed to be SAVE's lawful successor, income-based protection, but over a longer road to forgiveness. (Figures per Federal Student Aid and the Department's fact sheet.)
2. Tiered Standard Plan, fixed monthly payments over a term set by your balance: 10, 15, 20, or 25 years. Larger balances get longer terms and lower monthly payments. Predictable, no annual income recertification, but no income-based safety valve if your earnings drop, and unlike RAP, it doesn't count toward Public Service Loan Forgiveness.
3. Income-Based Repayment (IBR), the only legacy income-driven plan still available, and only to existing borrowers. If you take out any new federal loan on or after July 1, 2026 (say, for grad school), RAP becomes your only income-driven option across all loans, old and new combined. (Source)
| Plan | How it works |
|---|---|
| RAP | Payments run 1% to 10% of adjusted gross income, minus $50 per dependent, with a $10 monthly floor; remaining balances are forgiven after 30 years |
| Tiered Standard | Fixed monthly payments over a term set by your balance: 10, 15, 20, or 25 years |
| IBR | The legacy income-driven plan, still available only to existing borrowers |
How do you decide which plan fits you?
Forget "which plan is best", the right answer depends on two variables: your income trajectory and your balance.
- Income is low now but likely to grow (early career, residency, grad school):
RAP's income-based payments protect you now, and you'll pay the loans down as earnings rise. Watch the 30-year forgiveness horizon, it's long, but you're unlikely to need it.
- Income is stable and the balance is modest: Tiered Standard's fixed payments
get you done fastest with the least total interest, and there's no paperwork to maintain. If the 10-year payment fits your budget, this is usually the cheapest path.
- Balance is large relative to income and likely to stay that way (public service,
nonprofit, modest-paying field): run the IBR-vs-RAP math carefully, forgiveness timelines differ (20–25 years vs. 30), and the interest treatment isn't identical.
- You're pursuing PSLF: plan choice interacts with qualifying payments. Confirm
with your servicer that your chosen plan keeps you on track; don't assume.
The single most expensive mistake is inaction. Auto-enrollment into Standard on a large balance can mean a payment calibrated to a 10-year payoff of the full amount, far higher than anything income-based. Your 90-day window is real; mark the date on your servicer's notice and decide two weeks before it, not the day of.
One more sequencing question once the plan is picked: if the student loans aren't your only debt, the order you attack the rest matters. I ran the real numbers on debt avalanche vs snowball, the math, the psychology, and which actually gets you debt-free faster.
What if your 90 days already passed?
Not everyone got their notice in the first wave, and some borrowers only realized the clock had run out when the new payment amount showed up. If that's you, here's the missed-it path:
- Check what plan you're actually on. Log in to studentaid.gov and look at your
current repayment plan. If you were auto-enrolled, it's most likely the Standard or Tiered Standard plan.
- Auto-enrollment isn't permanent. Being placed on a plan by default doesn't
lock you in, contact your servicer and ask to switch to the plan you actually want (RAP, IBR, or Tiered Standard). Confirm the effective date of the switch and what your new payment will be before you agree.
- Don't skip the comparison step just because you're late. The whole point of
choosing deliberately still applies: run RAP vs. IBR vs. Tiered Standard on your actual numbers before you call, so you're switching to something rather than just switching away.
The worst outcome was never missing the notice, it was staying on the default plan for years without ever checking whether it fit.
What to do this week
- Log in to studentaid.gov and confirm which plan you're currently on and whether
your servicer has sent the transition notice (and when, that's your day zero).
- Pull your numbers: total balance, each loan's interest rate, your AGI.
- Model at least two plans side by side, monthly payment, total interest, payoff
date, forgiveness outcome. This is the step most borrowers skip, and it's the step that matters: the "cheapest monthly payment" and the "cheapest total cost" are rarely the same plan.
- Call your servicer with your comparison in hand and switch to the plan you
chose, whether you're inside your 90 days or correcting an auto-enrollment.
If you want the side-by-side modeling done for you, RAP vs. IBR vs. Tiered Standard vs. Standard on your actual loans, with your notice date tracked, that's exactly what the SAVE Exit Planner 2026 spreadsheet does: up to eight loans, all four plans compared, plus a servicer-call summary sheet so you're not fumbling for numbers on the phone.
The SAVE era is over. The borrowers who come out fine will be the ones who chose deliberately instead of being chosen for. Ninety days from your notice is plenty of time, if you start this week.
FAQ
What is happening to the SAVE plan? A June 2026 court-approved settlement between the Department of Education and Missouri terminated the SAVE plan outright. The Department directed the plan's roughly 7.5 million borrowers to exit into a lawful repayment plan. Starting July 1, 2026, servicers began notifying borrowers: you get 90 days to choose a new plan, and if you don't, one gets chosen for you.
What happens if I don't choose a new plan within 90 days? You're auto-enrolled, moved into either the Standard Repayment Plan or the new Tiered Standard Plan. Auto-enrollment is the worst way to choose, because neither default considers your income. Auto-enrollment into Standard on a large balance can mean a payment calibrated to a 10-year payoff of the full amount, far higher than anything income-based.
What are the three repayment options replacing SAVE? RAP, the new income-driven plan: payments run 1%–10% of adjusted gross income depending on income level, minus $50 per dependent with a $10 floor, and balances are forgiven after 30 years. The Tiered Standard Plan: fixed payments over 10, 15, 20, or 25 years based on balance. IBR: the only surviving legacy income-driven plan, for existing borrowers only.
How should I decide between RAP, IBR, and the Tiered Standard Plan? It depends on two variables: income trajectory and balance. Low income now but likely to grow favors RAP. Stable income with a modest balance favors Tiered Standard's fixed payments, usually the cheapest path. A large balance relative to income means running the IBR-vs-RAP math carefully. If you're pursuing PSLF, confirm with your servicer your plan keeps you on track.
What should SAVE borrowers do right now? Log in to studentaid.gov and confirm your current plan and whether your servicer sent the transition notice. Pull your numbers: total balance, each loan's rate, your AGI. Model at least two plans side by side, the cheapest monthly payment and the cheapest total cost are rarely the same. Decide two weeks before your 90-day deadline, not the day of.
Sources
Every policy claim in this article comes from one of these official publications, each opened and verified:
- U.S. Department of Education, "Announces Next Steps for Borrowers Enrolled in the Unlawful SAVE Plan" (June 2026), the court-approved Missouri settlement, the 7.5-million-borrower figure, 90-day servicer notices starting July 1, 2026, and automatic enrollment into the Standard or Tiered Standard plan for borrowers who don't choose.
- Federal Student Aid, "Top FAQs About Income-Driven Repayment Plans", the RAP payment formula (1–10% of AGI ÷ 12, minus $50 per dependent, $10 floor), the 30-year RAP term, which loans qualify for which plan, PAYE/ICR retirement by July 1, 2028, and confirmation that SAVE is no longer available.
- U.S. Department of Education, "Finalizes Landmark Rule to Lower College Costs and Simplify Student Loan Repayment" (April 30, 2026), the RISE final rule implementing the Working Families Tax Cuts Act (signed July 4, 2025); RAP and the Tiered Standard plan effective July 1, 2026.
- U.S. Department of Education, "Fact Sheet: Simplifying Student Loan Repayment", how RAP works (1–10% of income, $50 per dependent, unpaid-interest waiver, up to $50 matching principal payment), the 360-payment discharge, and the Tiered Standard plan's 10/15/20/25-year terms.
About Kollaz, Kollaz makes smart financial tools for modern money. This article's companion is the SAVE Exit Planner 2026 spreadsheet, model RAP vs IBR vs Tiered Standard on your actual loans, with your notice date tracked.