Federal student loan repayment rules are changing from July 1, 2026, and millions of borrowers who are still linked to the now-defunct SAVE plan need to take action soon. More than 300,000 borrowers have already exited the SAVE plan, but millions of others are still affected and could soon be moved to another repayment plan.
Borrowers who remain in SAVE are expected to hear from their loan servicers around July 1. After receiving that notice, borrowers will get 90 days to choose a different repayment plan, as per USA Today. Experts say borrowers should not delay making a decision. If they wait too long, they could lose access to some repayment options or end up paying more every month.
What SAVE borrowers should do now
Borrowers are being advised to visit StudentAid.gov immediately and review available repayment plans before the automatic transition happens. The Department of Education is also changing which repayment plans will be available after July 1, making it important for borrowers to understand their choices now.
Stacey MacPhetres of Bright Horizons said borrowers should actively explore and apply for another income-driven repayment plan before the deadline, as reported by USA Today. She warned that borrowers should not simply wait for the government to move them into a new plan automatically.
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Why staying in SAVE could be a problem
If borrowers do not choose a new repayment plan themselves, the government will choose one for them. Experts say this could result in higher monthly payments than they currently have.
Borrowers who remain in the SAVE plan and continue making monthly payments face another issue, according to Stacey MacPhetres via USA Today. She said those payments would not count toward Public Service Loan Forgiveness (PSLF) or income-driven repayment (IDR) forgiveness.
The Department of Education plans to automatically place some SAVE borrowers into one of the new repayment plans launching on July 1 if they do not make their own selection. USA Today reported that many borrowers will likely be automatically enrolled in the Standard Repayment Plan.
Student loan repayment plans change after July 1
The federal government is ending or restricting access to several current repayment programs after July 1. New borrowers receiving loans on or after July 1 will not be able to enroll in the Pay As You Earn (PAYE) repayment plan.
The Income-Contingent Repayment (ICR) plan will also stop accepting new borrowers with loans issued on or after July 1. Enrollment into Income-Based Repayment (IBR) will also be cut off for loans disbursed on or after July 1. Borrowers already using older IBR plans will be allowed to stay in them because those plans are being grandfathered in.
Starting July 1, new federal student loan borrowers will mainly have access to only two repayment plans, Standard Repayment Plan and Repayment Assistance Plan (RAP). RAP stands for Repayment Assistance Plan, a new income-driven repayment option.
Monthly payments under RAP will generally range from 1% to 10% of a borrower’s adjusted gross income. People earning less than $10,000 a year could pay as little as $10 per month, according to USA Today. Borrowers who stay in RAP long enough may qualify for loan forgiveness after 30 years of repayment.