Description
After years of scrutiny, the Trump administration has finally ended the SAVE Plan for student loan borrowers. Starting in July, loan servicers began sending out notices telling SAVE borrowers they have 90 days to pick a new plan.
According to the Department of Education, that timeline varies from person to person — depending on when that notice comes through. The Department added that anyone who wants to switch early “may contact their servicer at any time to enroll in a lawful repayment plan.”
The new payment plan options are:
- Repayment Assistance Plan (RAP): A new income-driven plan launched July 1, with monthly payments set at 1% to 10% of income depending on earnings.
- Income-Based Repayment (IBR): An existing income-driven plan that survives under the new law, with payments based on income and family size, and forgiveness after 20 or 25 years.
- Standard Repayment Plan: A fixed monthly payment for 10 years, regardless of income. This is the original default plan, and it applies to loans taken out before July 1, 2026.
- Tiered Standard Plan: A new fixed-payment plan launched July 1 with terms of 10, 15, 20 or 25 years depending on the borrower’s total loan balance — larger balances qualify for longer terms and lower monthly payments.
Borrowers coming off phased-out plans like SAVE can choose between the Repayment Assistance Plan, the Tiered Standard Plan or Income-Based Repayment.
Borrowers who don’t choose within that 90-day window will be automatically enrolled into the Standard Repayment Plan or the Tiered Standard Plan instead. Both plans calculate payments off loan balance rather than income.