If you have federal student loans, the ground just shifted. Starting July 1, 2026, the SAVE plan is being wound down and roughly 7.5 million borrowers are being pushed to choose a new repayment plan. The clock matters: you get about 90 days to decide before a servicer picks for you.
Why SAVE is going away
The SAVE plan was ruled unlawful, and the Department of Education is now directing every enrolled borrower to exit and move into a legal repayment plan. Servicers began issuing notifications in mid-2026. Once you receive yours, you have 90 days to pick an affordable option. Miss that window and you are automatically enrolled in either the Standard Repayment Plan or the new Tiered Standard Plan, neither of which may be your cheapest choice.
The new Repayment Assistance Plan (RAP)
- Income-based payments: your monthly amount is set by your income and number of dependents.
- Interest protection: borrowers who make full, on-time payments are shielded from runaway interest, so your balance does not balloon.
- Principal progress: RAP is designed so on-time payers actually chip away at principal, not just interest.
- Availability: RAP became available to borrowers on July 1, 2026.
The consolidation and new-loan trap
Here is the detail that catches people off guard. If all of your loans were taken out before July 1, 2026, you keep most of your existing repayment options and simply add RAP as a new choice. But the moment you take out even one new loan or consolidate any existing loans, you lose access to your current plans. From that point you can only repay through the Tiered Standard Plan or RAP.
That makes consolidation a decision to weigh carefully in 2026. Consolidating can simplify multiple loans into one, but it may also strip away a grandfathered repayment plan you would rather keep.
Legacy plans on the way out
Two older income-driven plans are also disappearing. Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) are scheduled to end on July 1, 2028. If you rely on either, plan your transition well before that date rather than waiting for a forced switch.
Your 2026 action checklist
- Watch for the notification from your servicer and note the 90-day deadline.
- Compare your monthly payment under RAP versus the Standard and Tiered Standard plans.
- Do not consolidate or take new loans until you understand what options you would forfeit.
- Update your income and dependent information so your payment is calculated correctly.
- Confirm your contact details with the servicer so you do not miss the notice.
Bottom line
The end of SAVE is not automatically bad news. RAP offers real interest protection and payments tied to what you actually earn. The danger is inaction: if you ignore the notification, a default plan gets assigned and it may cost you more each month. Treat the 90-day window as a hard deadline, run the numbers on each plan, and make a deliberate choice while you still can.