If you were on the SAVE plan, you've probably already gotten a notice from your loan servicer: SAVE is being wound down, and as of July 1, 2026, the Repayment Assistance Plan (RAP) created by the One Big Beautiful Bill Act (OBBBA) is the new income-driven plan for federal student loans. If you haven't picked a new plan, here's what's actually changed and what the clock is ticking on.
Why SAVE went away
SAVE spent most of its short life tied up in litigation. Courts blocked several of its key features — including its interest subsidy and faster path to forgiveness — almost from the start, and borrowers enrolled in it were parked in interest-free forbearance while the legal fight played out. OBBBA settled the question by terminating SAVE outright, along with phasing out two older plans, PAYE and Income-Contingent Repayment (ICR), by 2028.
What RAP does differently
The biggest structural change is the income measure itself. SAVE, IBR, and the other older plans calculate your payment off discretionary income — your AGI minus a poverty-line deduction that depends on your household size. RAP drops that adjustment and instead applies a set of AGI bands directly: a flat $10 a month if your AGI is under $10,000, then a percentage of your AGI that climbs from 1% to 10% in $10,000 increments as your income rises. If you have dependents, your payment drops by $50 a month per dependent, though it can never fall below the $10 minimum.
RAP also does something none of the older plans did: it guarantees your balance actually shrinks every month you make your required payment, even if that payment doesn't cover the interest that accrued — the government covers the gap. That removes the “growing balance despite paying on time” problem that frustrated a lot of borrowers on income-driven plans.
What you need to do in the next 90 days
If you were on SAVE, your servicer started the clock on July 1, 2026: you have 90 days to actively choose a repayment plan, or you'll be automatically enrolled in one without getting to weigh your options first. Loans first disbursed on or after July 1, 2026 can only use RAP as their income-driven option going forward — it's not a choice among several income-driven plans anymore for new borrowing, it's the only one.
If your loans predate that cutoff, you may still have other income-driven plans available for now (like IBR), so it's worth actually running the numbers before you default into whatever your servicer picks for you.
Run your own numbers before the deadline
Because RAP calculates payments off gross AGI rather than discretionary income, whether it saves you money compared to your old plan depends heavily on your income level and how many dependents you claim — there's no single answer that applies to everyone. Before your transition window closes, it's worth estimating what your RAP payment would actually be and comparing it against a standard 10-year repayment, rather than assuming the new plan is automatically better or worse than what you had.