If you were in SAVE, a letter or email from your servicer is on its way, if it isn't already in your inbox. It starts a clock: at least 90 days to choose a new repayment plan.
Do nothing, and you'll be put in the standard plan, which usually means a higher monthly payment (CBS News).
We flagged these changes in early June (Student loans change on July 1). Now they're here. Here's how to choose.
Your main options
1. The Repayment Assistance Plan (RAP), new as of July 1. According to an explainer from The Institute for College Access & Success (TICAS):
- Payments are 1% to 10% of your adjusted gross income, minus $50 a month per dependent, with a $10 minimum.
- Unpaid interest is waived. If your payment doesn't cover the month's interest, the rest doesn't pile onto your balance.
- Principal matching: if your payment would reduce your principal by less than $50, the government covers the difference so your balance drops by at least $50 a month.
- Any remaining balance is forgiven after 360 qualifying payments (30 years). RAP payments also count toward Public Service Loan Forgiveness ( Education Department ).
2. Income-Based Repayment (IBR). Still available to borrowers with older loans, and you no longer need to show a "partial financial hardship" to get in (Education Department).
3. Standard or fixed plans. Higher payments, but the loan is paid off sooner and you pay less interest over time.
ICR and PAYE are closing. TICAS notes they end on July 1, 2028, and borrowers with only pre-July 2026 loans keep their current choices until then.
Run the numbers
$30,000 balance at 6% interest. (Illustrative: RAP payment assumes a 4% rate on $45,000 of income; your bracket may differ.)
| Standard, 10 years | RAP | |
|---|---|---|
| Monthly payment | ≈ $333 | $150 |
| Monthly interest | $150 | $150 |
| What happens to the balance | Falls ≈ $183/month | Payment covers interest; government match cuts principal by $50 |
| Best for | Paying off fast, least total interest | Lower payment now, protection from a growing balance |
The key RAP feature is that your balance can't balloon. Under some older plans, low payments meant unpaid interest kept stacking up. Under RAP, it's waived.
Fee check
- Choosing a plan is free. Never pay a company to pick or switch your plan. Do it yourself at StudentAid.gov or through your servicer.
- The cost of doing nothing: automatic placement in the standard plan, which can mean a payment you didn't budget for.
- Collections: student loan delinquencies have been elevated. The New York Fed reported about 2.6 million borrowers moved to the Education Department's Default Resolution Group in the first quarter ( New York Fed ). If you're behind, call your servicer before your loans reach that point.
How to pick in 3 steps
- Find your notice and write down your deadline.
- Use the Loan Simulator on StudentAid.gov to compare RAP, IBR and standard with your real income and family size.
- Choose based on your goal: lowest payment (usually RAP or IBR), fastest payoff (standard), or Public Service Loan Forgiveness (a qualifying income-driven plan).
Do this today: search your email for messages from your loan servicer since July 1, and put your plan deadline in your calendar with a reminder two weeks before.
Sources
- CBS News via KYMA, SAVE plan ends, giving borrowers 90 days to pick new way to repay , July 1, 2026
- The Institute for College Access & Success, Explainer: Student loan repayment changes starting July 1, 2026
- U.S. Department of Education, Dear Colleague Letter on One Big Beautiful Bill Act loan provisions , July 18, 2025
- Federal Reserve Bank of New York, Household Debt and Credit Report, Q1 2026 , May 12, 2026
Student loan rules depend on your loan types and dates. This article is for general information, not individual advice. Check StudentAid.gov or your servicer for your situation.