Life after SAVE: How to choose a repayment plan under the new rules

A 2025 federal law created a new income-based plan, setting end dates for older ones, and splitting borrowers into two groups. Knowing which group you're in is the first step.

Which group are you in?

Existing borrowers took out all their federal loans before July 1, 2026, with no new loans or consolidation since. You have the most choices.

New borrowers took out any federal loan on or after July 1, 2026, including a new consolidation loan. You're limited to two plans, and that limit applies to all your federal loans, even older ones.

Plans for existing borrowers

Repayment Assistance Plan (RAP): Your payment is 1% to 10% of your adjusted gross income, with the percentage increasing as your income increases. You subtract $50 a month for each dependent, and the minimum payment is $10. As long as you make your payment, any interest it doesn't cover is waived, so your balance won't grow. Any balance left after 30 years is forgiven. RAP payments count toward Public Service Loan Forgiveness (PSLF).

Income-Based Repayment (IBR): Your payment is 10% or 15% of your discretionary income, depending on when you first borrowed. It's never more than the standard 10-year payment. Any remaining balance is forgiven after 20 or 25 years. You no longer have to prove financial hardship to get in.

Standard, graduated, and extended plans: These set fixed payments based on what you owe. The 10-year standard plan costs the least over time but has the highest monthly payment. Graduated plans start low and rise every two years. Extended plans stretch payments out for up to 25 years.

PAYE and ICR: These are older, income-driven plans, and they’re closing on July 1, 2028. Anyone still in them will be moved, usually to RAP.

Plans for new borrowers

RAP: Same as above.

Tiered Standard Plan: Fixed payments over 10 to 25 years, depending on your total balance. Under $25,000 is 10 years. $100,000 or more is 25 years. Payments under this plan don't count toward PSLF.

What if you were in SAVE?

You should have gotten, or will get, a notice from your servicer. From that point, you have 90 days to choose. If you miss that window, you'll get a final 30-day notice. After that, you'll be enrolled in the standard or tiered standard plan, which bases payments on your balance, not your income.

Interest has been building on SAVE loans since August 2025, and time spent in that forbearance usually doesn't count toward forgiveness. Choosing a plan soon gets your clock running again.

How to choose

If your income is low or varies a lot, RAP or IBR will usually give you the smallest payment. Check both in the Loan Simulator on StudentAid.gov to compare.

If you work in public service, pick a plan that counts toward PSLF, like RAP or IBR.

Avoid the tiered standard plan.

If you can afford higher payments, a standard plan gets you out of debt fastest and costs the least in interest.

If you're thinking about consolidating, pause first. A new consolidation loan makes you a "new borrower" and closes the door on IBR and other legacy plans.

You can apply for a plan through StudentAid.gov or your servicer. Keep paying your current bill until the new plan starts.