The SAVE plan is over. Doing nothing picks your new payment for you.
About 7 million borrowers are getting a 90-day notice. Miss it and your servicer parks you on the Standard plan.
August 13, 2026 · 5 min read
If your federal student loans were parked in the SAVE plan, the parking lot closed. Starting July 1, 2026, servicers began mailing notices to the roughly 7 million borrowers sitting in it, and each notice starts a 90-day clock to pick a new plan. The earliest of those clocks run out around the end of September.
Ignore the letter and you don't stay put. You get moved, most likely onto the Standard plan, which sets your payment from your balance instead of your income. That's the one outcome nobody picks on purpose. So pick on purpose.
Two plans replaced the alphabet soup
July 1 also launched the Repayment Assistance Plan, known as RAP, alongside a Tiered Standard plan that runs 10, 15, 20, or 25 years depending on your balance. Anyone borrowing for the first time after that date gets those two options and nothing else. PAYE and ICR stopped taking new enrollees the same day and disappear entirely by July 1, 2028.
One rule matters more than the rest: if your loans were disbursed before July 1, 2026, you keep access to Income-Based Repayment. IBR isn't sunsetting for you. So most people leaving SAVE right now are really choosing between RAP and IBR, and those two run very different math.
RAP counts every dollar you earn. IBR doesn't.
RAP charges a percentage of your entire adjusted gross income. At $10,000 or less you pay $10 a month. From $10,001 to $20,000 it's 1% of AGI, then 2% up to $30,000, climbing a point per $10,000 bracket until it caps at 10% above $100,000. Each dependent you claim knocks $50 a month off the result, with $10 a month as the floor.
IBR starts from a smaller base. It charges 10% of discretionary income, which is your AGI minus 150% of the federal poverty guideline. For a single person in the lower 48 in 2026, that shield is $23,940. Income below that line doesn't count at all. Under RAP it counts from the first dollar, which is why the cheaper plan flips depending on what you make.
Three incomes, three different answers
Take a single filer, no dependents, with loans from before July 2026 so both plans are on the table. At $28,000 of AGI, RAP asks 2% of the whole thing, about $47 a month. IBR asks 10% of the $4,060 sitting above the poverty shield, about $34. IBR wins at the bottom.
At $55,000 it flips. RAP is 5% of AGI, about $229, against roughly $259 under IBR. At $80,000 the two land in a near-perfect tie around $467. Push higher and IBR pulls ahead again: at $110,000, RAP takes 10% of everything, about $917 a month, versus about $717 under IBR. That's $200 a month riding on which form you file.
The small payment has a 30-year tail
RAP's best feature is that your balance can't grow. If your payment doesn't cover the month's interest, that interest gets waived instead of piled onto the loan, and the Education Department adds up to $50 a month toward principal when your own payment doesn't get there. That fixes a real problem: the department's own figures show 3 out of 4 borrowers in income-driven plans owed more than they originally borrowed six years into repayment.
What it costs is time. RAP forgives the remainder after 360 on-time payments. Thirty years. IBR forgives after 20 for loans taken out after July 2014, or 25 for older ones. And the debt you're stretching isn't cheap: loans disbursed this school year carry 6.52% for undergrads, 8.07% for grad unsubsidized, and 9.07% for PLUS. A low required payment is a cash-flow tool, not a discount. The plan you pick sets your floor, not your ceiling, so pay above it in any year you can.
Don't
- 🚫Let the 90-day notice lapse and get dropped onto the Standard plan
- 🚫Assume RAP is cheaper just because it's the new plan
- 🚫Treat a 30-year forgiveness date as an actual payoff plan
Do
- ✅Open the servicer notice and write down the exact deadline
- ✅Run your own AGI through both formulas before you choose
- ✅Pay more than the minimum in the years you can afford to
The takeaway
RAP takes a slice of every dollar you earn. IBR only touches income above $23,940. Roughly speaking, IBR is cheaper below $30,000 and above $80,000, RAP is cheaper in between, and the default your servicer picks for you is the biggest payment of the three.
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CalcWise is educational and not financial advice. Consider your own circumstances or a qualified professional for big decisions.