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Millions of Americans with federal student loans are facing a major change in how they repay their debt. The Saving on a Valuable Education (SAVE) Plan, which had placed millions of borrowers in an income-driven repayment program, is no longer available following a court-approved settlement that ended the program in March 2026.
The U.S. Department of Education is now moving borrowers toward other repayment options. The transition is not automatic for everyone: borrowers receive individual notices from their loan servicers, and the deadline to choose a new plan depends on when that notification arrives.
The change comes as student debt remains a major part of household finances. The Federal Reserve Bank of New York reported that outstanding student loan balances reached $1.66 trillion in the third quarter of 2026, after increasing by $5 billion from the previous quarter.
SAVE is over: What borrowers must do next
The Department of Education announced that more than 7.5 million borrowers enrolled in SAVE would need to leave the program and select another legal repayment plan. Federal Student Aid began sending guidance in March, while loan servicers started issuing individual transition notices on July 1, 2026.
According to the official guidance, borrowers have 90 days from the date of their servicer’s notice to choose another plan. The deadline is not the same for everyone because notifications are being sent in groups.
If a borrower does not make a selection within those 90 days, the servicer sends a final 30-day notice. Those who still do not act by the end of that additional period face automatic reassignment, which can result in higher monthly bills. The fallback option depends on the borrower’s loan history:
- Loans disbursed before July 1, 2026: Borrowers are generally returned to the repayment plan they were enrolled in prior to SAVE—often the Standard Repayment Plan—unless they actively select another eligible option.
- Loans disbursed on or after July 1, 2026: Borrowers who do not choose a plan are placed into the new Tiered Standard Plan once their loans enter repayment.
The monthly amount can change substantially depending on the plan, the outstanding balance and the borrower’s circumstances. Federal Student Aid recommends checking the notice from the loan servicer rather than assuming that every borrower has the same deadline or payment date.
Which repayment plans are available now?
The federal government introduced two new repayment options on July 1, 2026, as part of the changes established by the Working Families Tax Cuts Act. Their availability depends on the type of loan and when it was disbursed.
The two new options are:
- Repayment Assistance Plan (RAP): calculates monthly payments based on adjusted gross income. The payment generally ranges from 1% to 10% of income, depending on earnings, and is reduced by $50 per month for each dependent claimed on the federal tax return. The minimum payment is $10.
- Tiered Standard Repayment Plan: offers fixed repayment periods of 10, 15, 20 or 25 years, depending on the borrower’s outstanding loan balance. Higher balances can qualify for longer repayment periods and lower monthly payments.
Some borrowers with loans issued before July 1, 2026, may also qualify for other existing options, including Income-Based Repayment (IBR), Pay As You Earn (PAYE) or Income-Contingent Repayment (ICR), depending on their loan type and eligibility.
RAP also includes protections for borrowers who make full, on-time payments. The government can waive unpaid monthly interest and contribute up to $50 toward the principal when the borrower’s payment does not reduce it by at least that amount.
How to check the deadline and avoid an unexpected payment
Because notices are being rolled out in batches—and early recipients have already passed their initial 90-day window—borrowers enrolled in SAVE should immediately check their email, postal mail and online servicer portal for the notice titled “You Have 90 Days to Select a New Repayment Plan” (or a subsequent 30-day final warning).
The next steps are:
- Check the loan servicer’s notice: the 90-day period begins on the date of that notification, not when Federal Student Aid sends a general email.
- Review the loan information: log in to StudentAid.gov to confirm loan types, balances and disbursement dates.
- Compare repayment options: use the federal Repayment Calculator to estimate monthly payments and understand how each plan affects the total amount paid.
- Submit a new application: choose an eligible plan through StudentAid.gov before the deadline.
Borrowers who cannot afford their new monthly payment can contact their loan servicer to ask about available deferment or forbearance options. However, interest may continue to accrue during these periods, and they can affect progress toward loan forgiveness programs.