SAVE Plan Ended: What 7.5M Borrowers Need to Know (2026)

Updated April 6, 2026. If you are one of the 7.5 million borrowers who were enrolled in the SAVE (Saving on a Valuable Education) plan, this is the most important student loan article you will read this year. The SAVE plan is gone. It was blocked by federal courts in 2025 and permanently replaced by the OBBBA (One Big Beautiful Bill Act) legislation signed into law in early 2026. You have until July 1, 2026 to choose a new repayment plan, or your servicer will choose one for you.

This guide explains exactly what happened, what your new options are, what the July 1 deadline means, and the specific steps you should take right now to protect your finances and your progress toward loan forgiveness.

What Happened to the SAVE Plan

The SAVE plan was introduced in 2023 as the most generous income-driven repayment plan ever offered by the Department of Education. It calculated payments at just 5% of discretionary income for undergraduate loans (10% for graduate), used a higher income exemption of 225% of the federal poverty level, and offered a 100% interest subsidy — meaning your balance would never grow due to unpaid interest, even if your payment was zero.

In 2024, multiple states filed lawsuits challenging the SAVE plan, arguing that the Department of Education exceeded its authority in creating such generous terms. In August 2025, the Eighth Circuit Court of Appeals blocked the plan nationwide. Rather than continuing to fight in the courts, Congress included student loan repayment reform in the omnibus OBBBA legislation, which created two new repayment structures to replace SAVE.

As of February 2026, no new enrollments in SAVE are accepted. Existing SAVE borrowers have been placed in an administrative forbearance while they transition to new plans. This forbearance period ends on July 1, 2026.

Your Two New Options

The OBBBA created two new repayment options for federal student loan borrowers: the RAP (Repayment Assistance Plan) and the Tiered Standard Plan. Here is how they compare to the old SAVE plan:

The RAP Plan: Your Best Option for Most Borrowers

For the majority of former SAVE borrowers, the RAP (Repayment Assistance Plan) is the recommended replacement. While it is not as generous as SAVE was, it still provides income-driven payments, interest subsidies, and a path to forgiveness.

How RAP payments are calculated: RAP uses a formula that considers both your income and your total debt load. The base payment is calculated as a percentage of your discretionary income (income above 200% of the federal poverty level), adjusted by your debt-to-income ratio. Borrowers with lower incomes relative to their debt will see lower payments.

Interest subsidy: RAP covers 50% of unpaid interest that accrues when your monthly payment does not cover the full interest charge. This is less generous than SAVE's 100% subsidy but still prevents your balance from growing as rapidly as it would on other plans.

Forgiveness timeline: RAP offers forgiveness after 20 years for borrowers with only undergraduate loans and 25 years for those with graduate loans. Unlike SAVE, there is no accelerated forgiveness for low-balance borrowers.

PSLF compatibility: RAP payments count toward Public Service Loan Forgiveness. If you work in public service, you can still achieve forgiveness after 120 qualifying payments (10 years).

Broader loan eligibility: Unlike SAVE, which only covered Direct Loans, RAP also accepts consolidated FFEL loans. If you have older FFEL loans, you can consolidate them into a Direct Consolidation Loan and enroll in RAP.

The Tiered Standard Plan

The Tiered Standard Plan is the new default plan for borrowers who do not actively select another option. It features fixed monthly payments that are tiered based on your total loan balance. Payments are not based on income and the plan does not offer forgiveness or count toward PSLF.

This plan works for borrowers who have higher incomes, want to pay off their loans faster, and are not pursuing forgiveness. However, for most former SAVE borrowers — who likely enrolled in SAVE specifically for its income-driven features — the Tiered Standard Plan will mean significantly higher monthly payments.

What to Do Right Now: Step-by-Step

1. Log in to your servicer's website. Go to StudentAid.gov to confirm your servicer and access your account. Check whether your account shows "SAVE - Administrative Forbearance" or has already been transitioned.
2. Calculate your RAP payment. Use our repayment comparison calculator to estimate what your payment would be under RAP versus other available plans. Enter your current income, family size, and total loan balance.
3. Decide between RAP and other IDR plans. RAP is the main replacement for SAVE, but IBR and PAYE are still available. Compare payments across all plans — in some income and debt scenarios, IBR or PAYE may actually give you a lower payment than RAP.
4. Submit your plan selection before July 1, 2026. You can select your new plan through your servicer's website or by calling them directly. Do not wait until June — servicer call centers will be overwhelmed as the deadline approaches.
5. Recertify your income. When you enroll in RAP, you will need to provide current income documentation. Have your most recent tax return or pay stubs ready.
6. Verify your payment count. Confirm that your servicer has correctly counted all your previous qualifying payments, including those made under SAVE. These payments should carry over to RAP for forgiveness purposes.
7. Set up autopay. Most servicers offer a 0.25% interest rate reduction for borrowers who enroll in automatic payments. This small discount adds up over time.

Will My SAVE Payments Count Toward Forgiveness?

Yes. All qualifying payments made while enrolled in the SAVE plan count toward both IDR forgiveness and PSLF forgiveness. The OBBBA legislation explicitly preserved payment credits for borrowers transitioning from SAVE to RAP. Your forgiveness clock does not reset.

However, the administrative forbearance period (from when SAVE was blocked through July 1, 2026) does not count toward forgiveness. These months are essentially paused time. Once you enroll in RAP and begin making payments again, your counter picks up where it left off.

Special Considerations for PSLF Borrowers

If you are pursuing Public Service Loan Forgiveness, your priority is enrolling in RAP as quickly as possible. Every month in administrative forbearance is a month that does not count toward your 120-payment requirement. The sooner you enroll in RAP and resume qualifying payments, the sooner you reach forgiveness.

RAP payments are PSLF-eligible, so your transition should be seamless. Just make sure to submit a new PSLF Employment Certification Form after enrolling in RAP to ensure your employer still qualifies.

Should You Consider Refinancing Instead?

With the loss of SAVE's generous terms, some borrowers may want to consider private refinancing. Current refinance rates start as low as 4.29% with top lenders, compared to the 6.53% federal rate. However, refinancing means giving up federal protections including IDR plans, forbearance options, and forgiveness eligibility.

Refinancing makes sense if you have a high income, good credit, are not pursuing forgiveness, and do not need federal safety net protections. It does not make sense if you are working toward PSLF, have an unstable income, or would struggle to make fixed payments during a financial hardship.