SAVE Is Officially Dead. Millions of Borrowers Have 90 Days to Act
If you have federal student loans, July 1 was not just another date on the calendar. It was the day the biggest overhaul of student loan repayment in more than a decade actually took effect.
The SAVE plan is officially being shut down. Roughly 7.2 million borrowers now have a 90-day window to choose a new repayment plan before their servicer picks one for them.
Going forward, a new plan called the Repayment Assistance Plan, or RAP, becomes the main income-based option.
Here is what changed and what you need to do about it.
What Took Effect on July 1
The student loan sections of the One Big Beautiful Bill Act are now live. The law rewrites how federal borrowers repay, how much new students can borrow, and which repayment plans even exist.
The repayment changes are hitting people first, because they come with a deadline.
The Repayment Plans, Before and After
Plan | Status as of July 1, 2026 |
|---|---|
SAVE | Being shut down. Enrolled borrowers must switch within 90 days of their servicer notice. |
PAYE | Closes permanently on July 1, 2028. |
ICR | Closes permanently on July 1, 2028. |
IBR | Stays open for existing borrowers. |
Standard, Graduated, Extended | Still available. |
RAP (new) | Available now. The only income-driven plan for anyone borrowing on or after July 1, 2026. |
Tiered Standard (new) | Fixed payments over 10 to 25 years, based on balance. |
If you take out a loan on or after July 1, 2026, your only two choices are RAP and the Tiered Standard plan. Every other income-driven plan is closed to new borrowers.
How RAP Actually Works
RAP ties your monthly payment to your income, but the formula is different from the plans it replaces. Your payment is a percentage of your adjusted gross income (AGI), and that percentage climbs by one point for every extra $10,000 you earn.
It starts at 1 percent and caps at 10 percent. Anyone earning $10,000 or less pays a flat $10. You subtract $50 from your monthly payment for each dependent you claim, and no payment drops below $10.
Here is roughly what that looks like for a single borrower with no dependents:
Annual income (AGI) | RAP rate | Estimated monthly payment |
|---|---|---|
$25,000 | 2% | about $42 |
$40,000 | 3% | about $100 |
$60,000 | 5% | about $250 |
$80,000 | 7% | about $467 |
$100,000 | 9% | about $750 |
Two features make RAP friendlier than older plans. Any unpaid interest is waived every month, so your balance will not balloon the way it did when interest piled up on plans like the old SAVE and IBR.
And if your payment does not cover at least $50 of your principal, the government covers the difference, so your balance actually moves down.
The trade-off is time. RAP forgives whatever is left after 30 years of payments, whether your loans are from undergrad or grad school.
That is longer than the 20 to 25 years most of the plans it replaces offered. Payments still count toward Public Service Loan Forgiveness, so borrowers on the 10-year PSLF track are not pushed out to 30 years.
The SAVE Deadline You Should Not Ignore
The most urgent piece is SAVE. The plan was frozen in court for more than a year, and now it is being wound down for good. If you were enrolled, your loan servicer will send a notice, and you have 90 days from that notice to pick a new plan.
Miss the window and you get moved into the Standard plan automatically, which for many borrowers means a far bigger monthly payment than an income-based plan would.
The default is not built in your favor. Log in, read the notice, and compare RAP against Standard before it kicks in.
Borrowing Changed Too
Repayment is not the only thing that shifted. The same law capped how much students and parents can borrow and eliminated Grad PLUS loans for new graduate and professional students. The short version:
Graduate students: $20,500 a year, $100,000 lifetime.
Professional students (law, medical, and now nursing, physical therapy, and others): $50,000 a year, $200,000 lifetime.
Parent PLUS: $20,000 a year and $65,000 total per child, down from effectively unlimited.
A new overall cap of $257,500 in federal student loans per borrower.
We broke down the borrowing side in detail in our earlier report on the law. This story focuses on the repayment changes hitting borrowers right now.
What to Do This Week
If you were on SAVE: watch for your servicer notice and choose a plan inside the 90 days. Do not let the automatic Standard enrollment decide for you.
If you are on IBR, PAYE, or ICR: you keep your plan for now, but PAYE and ICR close for good on July 1, 2028.
If you are borrowing for the first time in 2026-27: RAP and Tiered Standard are your only options, so compare both before you sign.
If you are years away from borrowing: the new caps make it worth understanding federal versus private loans and filing the FAFSA early, since federal room is now limited.
The Bottom Line
Log in to your loan servicer account this week and confirm which plan you are on. If it says SAVE, your 90-day clock is already running.
The borrowers who come out ahead are the ones who compare RAP against the Standard plan on purpose, instead of letting an auto-enrollment do it for them.