The Saving on a Valuable Education (SAVE) plan, the income-driven repayment program created in 2023, is ending. A December 2025 settlement between the Trump administration and the State of Missouri dismissed the SAVE litigation in exchange for the Department of Education agreeing not to enroll any new borrowers, to deny pending applications, and to move the roughly 7.5 million existing SAVE borrowers into legal repayment plans. The replacement income-driven plan — the Repayment Assistance Plan (RAP) — launches on July 1, 2026, alongside a new Tiered Standard Plan. PAYE and ICR are also on the way out, with a hard deadline of July 1, 2028. This guide covers the timeline, the new payment formulas, and what each group of borrowers should do.
Model your monthly payment under each plan
Our student loan repayment calculator runs Standard, Graduated, IBR, and RAP scenarios side-by-side using your balance, rate, and AGI.
Open Student Loan Calculator →The Timeline — What Happens When
| Date | Event |
|---|---|
| Dec 9, 2025 | Trump administration and Missouri settle the SAVE litigation. ED agrees to wind down the plan. |
| Through June 30, 2026 | SAVE borrowers remain in administrative forbearance. Interest continues to accrue. |
| Around July 1, 2026 | Servicers begin mailing notices to SAVE borrowers. The new RAP plan and Tiered Standard Plan become available. |
| ~90 days after notice | Each borrower's window to actively select a new plan closes. No selection = auto-enrollment in Standard or Tiered Standard. |
| July 1, 2028 | PAYE and ICR are eliminated. Borrowers still in those plans must move to IBR or RAP. |
Source: US Department of Education press releases (October 2025; December 2025); StudentAid.gov plan transition guidance.
RAP Payment Formula
RAP, created by Public Law 119-21 (the FY2025 reconciliation law), uses a sliding percentage of adjusted gross income (AGI). The minimum payment is $10 per month for the lowest earners. The percentage rises by one point for every $10,000 of AGI above $10,000, capping at 10% for AGI above $100,000.
| Adjusted Gross Income | % of AGI | Annual Base | Monthly Base |
|---|---|---|---|
| $10,000 or less | — | $120 (floor) | $10 |
| $20,000 | 1% | $200 | $17 |
| $40,000 | 3% | $1,200 | $100 |
| $60,000 | 5% | $3,000 | $250 |
| $80,000 | 7% | $5,600 | $467 |
| $100,000 | 9% | $9,000 | $750 |
| $150,000 | 10% | $15,000 | $1,250 |
Source: Public Law 119-21 (FY2025 reconciliation); Congressional Research Service IF13075; StudentAid.gov.
Dependent reduction: $50 per dependent per month is subtracted from the base. A borrower with $60,000 AGI and two dependents pays $250 − $100 = $150/month.
Principal match: If the borrower's monthly payment is less than the interest accruing, the Department of Education applies a $50 match to principal, designed to ensure all borrowers see their balance shrink even on the smallest payments.
IDR Plans Still Available After July 2026
| Plan | Payment Formula | Forgiveness | Status |
|---|---|---|---|
| RAP (new) | 1–10% of AGI, $10 min, $50 per dependent | 30 years | Available July 1, 2026 |
| IBR | 10% (new borrowers) or 15% (older) of discretionary income | 20 or 25 years | Remains available |
| PAYE | 10% of discretionary income | 20 years | Closed to new enrollment; ends July 1, 2028 |
| ICR | 20% of discretionary income (lesser of two formulas) | 25 years | Closed to new enrollment; ends July 1, 2028 |
| SAVE | 5–10% of discretionary income | 10–25 years | Wound down — all borrowers moved out |
Source: Public Law 119-21; ED implementation guidance; StudentAid.gov.
What Each Group of Borrowers Should Do
If you are currently enrolled in SAVE
Watch for your servicer's notice starting July 2026. Choose actively — IBR is still available to you, and for many SAVE borrowers IBR will produce a lower payment than RAP. If you don't pick anything inside the 90-day window, you'll be defaulted into Standard, which is usually the most expensive option.
If you are pursuing PSLF (Public Service Loan Forgiveness)
RAP qualifies for PSLF, as does IBR. SAVE payments made during forbearance count toward PSLF under separate ED guidance. Make sure your employer certification (PSLF Form) is up to date and that your payments are recorded on a qualifying plan after July 2026.
If you have loans first disbursed after July 1, 2026
Your only IDR option is RAP. The Tiered Standard Plan is a fixed-payment alternative. Compare both before signing up — the Tiered Standard may have a lower total cost if your AGI is high relative to your balance.
If you are currently in PAYE or ICR
You can stay until July 1, 2028. Before that date you must move to IBR or RAP — model both. PAYE has the cleanest 10%/20-year terms, so the move usually means either similar terms in IBR (for older PAYE borrowers) or a different math entirely in RAP.
Compare your payment under each plan side-by-side:
Open Student Loan Calculator →Frequently Asked Questions
Is the SAVE plan ending in 2026?
Yes. Under the December 2025 Missouri settlement, the Department of Education will not enroll any new borrowers in SAVE, will deny pending applications, and will move all current SAVE borrowers into legal repayment plans. Servicers begin sending notices to the 7.5 million enrolled borrowers around July 1, 2026, with a 90-day window to choose a new plan.
What happens if a SAVE borrower does nothing after the 90-day window?
The Department has said borrowers who take no action by the end of the 90-day window will be automatically enrolled in either the existing Standard Repayment Plan or the new Tiered Standard Plan. Both have fixed payments that are usually higher than IDR — borrowers who need an income-based plan should actively elect one.
What is the Repayment Assistance Plan (RAP)?
RAP is a new income-driven repayment plan created by the FY2025 reconciliation law (P.L. 119-21) that launches July 1, 2026. Monthly payments are based on adjusted gross income, ranging from a $10 minimum for AGI of $10,000 or less up to 10% of AGI for borrowers earning above $100,000. Dependents reduce the payment by $50 per dependent per month.
Are PAYE and ICR going away?
Yes. The Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans will be eliminated by July 1, 2028. Existing borrowers may remain enrolled until that date but no new enrollments are allowed under the reconciliation law. IBR remains available.
What IDR plans remain for new borrowers in 2026?
Two options: the existing Income-Based Repayment (IBR) plan, and the new Repayment Assistance Plan (RAP) launching July 1, 2026. Borrowers with loans first disbursed after that date will only have RAP as their IDR choice. Borrowers with older loans can still elect IBR.
Does RAP qualify for PSLF?
Yes. RAP is a qualifying payment plan for Public Service Loan Forgiveness, alongside IBR and the Standard 10-year plan. The Department has confirmed PSLF eligibility for payments made under RAP from launch in July 2026.
Sources & Further Reading
- US Department of Education — Next steps for SAVE plan borrowers.
- ED — Missouri SAVE settlement (December 2025).
- StudentAid.gov — Income-Driven Repayment Plan Request.
- Congressional Research Service IF13075 — The Repayment Assistance Plan (RAP) in P.L. 119-21.
For informational purposes only. Not legal, tax, or financial advice. Implementation details may change as the Department of Education issues final guidance — verify with your servicer and StudentAid.gov before electing a plan.