The SAVE Plan Has Ended: RAP vs. IBR and What to Do Before Your Deadline

What Got Eliminated — and for Whom

Under OBBBA, once you have any Direct Loan first disbursed on or after July 1, 2026 — including a consolidation loan — you can repay all of your Direct Loans only under RAP or the Tiered Standard Plan. These income-driven plans are closed to you:

The trigger is a new loan, not whether you're a first-time borrower. If all of your Direct Loans were disbursed before July 1, 2026, you keep access to IBR, and ICR and PAYE stay open to you until they close on July 1, 2028. Take out one new loan — even while still in school, or a consolidation loan — and those plans close to you for all of your loans, according to studentaid.gov. SAVE is different: it ended for everyone by court order, as explained below. Any borrower can choose RAP for Direct Loans other than Parent PLUS loans.

Don't confuse this with the loan-limit exception this site calls legacy borrower status. That exception affects how much a student or parent can borrow; a loan taken out under it is still a new loan for repayment purposes.

What SAVE Was — and Why It's Gone

SAVE — Saving on a Valuable Education — was the Biden administration's 2023 revision of REPAYE (Revised Pay As You Earn). SAVE calculated payments at 10% of discretionary income (5% for undergraduate loans), with discretionary income measured above 225% of the federal poverty guideline — so borrowers with incomes below that threshold paid $0 per month.

SAVE also included an interest subsidy that kept balances from growing when payments didn't cover accruing interest, and forgiveness after as little as 10 years for small original balances, up to 20 or 25 years. It was blocked by federal courts, and SAVE borrowers were placed in forbearance while the case went on. The Department of Education settled with the State of Missouri in December 2025, and on March 10, 2026 a federal court issued an order preventing the Department from implementing SAVE (studentaid.gov).

Starting July 1, 2026, loan servicers began sending notices to SAVE borrowers. Each borrower has 90 days from the date of their own notice to choose a new repayment plan. Borrowers who don't choose are placed in the Standard plan or the new Tiered Standard plan — not RAP — and those payments aren't based on income. You can switch before your notice arrives or before your deadline by contacting your servicer (Department of Education announcement).

How RAP Works: The New Formula Explained

The Repayment Assistance Plan (RAP) uses a fundamentally different formula than every prior IDR plan. Where old plans calculated payments as a percentage of discretionary income (income above a poverty-level threshold), RAP calculates payments as a percentage of Adjusted Gross Income directly — with no income-protection floor for payments, only a statutory payment minimum of $10/month.

The RAP rate scales with income in flat brackets:

The rate applies to your full AGI — not to income above any threshold. A borrower with $45,000 AGI pays 4% of $45,000 a year, divided by 12. That's $150/month, regardless of loan balance. Your balance affects how long it takes to pay the loan off, not the monthly payment.

Each dependent you claim reduces the monthly payment by $50, but the payment never falls below the $10 minimum. A borrower with $45,000 AGI and two dependents pays $150 − $100 = $50/month.

RAP's Two Key Protections

RAP includes two borrower protections aimed at balances that grow even when payments are made:

1. Interest Subsidy

If a borrower's full, on-time RAP payment doesn't cover the interest that accrued that month, the government covers the rest. According to studentaid.gov, as long as every payment is on time and in full and you don't take a deferment or forbearance, your balance won't go higher than it was when you entered RAP. Under older IDR plans, balances could grow even with steady payments.

2. Principal Guarantee

If an on-time RAP payment doesn't reduce the principal by at least $50 — or by the payment amount, if the payment is smaller — the government makes a matching principal payment for the difference. A borrower paying $100 a month whose payment mostly goes to interest still sees the balance drop by at least $50; a borrower paying the $10 minimum sees it drop by at least $10. Either way, on-time payments always make progress on the balance.

These protections can make RAP cheaper over time than an older plan for some borrowers, even though its percentage-of-AGI formula produces a higher monthly payment for some middle-income borrowers. Compare both with your own numbers.

All Five Plans at a Glance: Before and After OBBBA

The matrix below compares the older plans with RAP. SAVE has ended. IBR stays open to borrowers whose loans were all disbursed before July 1, 2026; PAYE and ICR close by July 1, 2028. RAP is the only income-driven option for anyone with a loan disbursed on or after July 1, 2026.

† SAVE ended by court order on March 10, 2026; its column is shown for comparison only. IBR stays open to borrowers whose loans were all disbursed before July 1, 2026; ICR and PAYE close to them by July 1, 2028. RAP forgiveness comes after 360 qualifying payments over at least 30 years, regardless of balance. Sources: studentaid.gov IDR plans; ED final rule, 34 CFR 685.209. FPL (family of 1, 2026): $15,960.

RAP vs. SAVE: A Direct Comparison

For borrowers with very low incomes (below 225% FPL), SAVE was more favorable because it allowed $0 monthly payments. That option is gone. RAP's $10/month minimum means the lowest-income borrowers pay slightly more — but they also get the interest waiver and principal match. IBR can still produce a $0 payment for borrowers below 150% FPL, which is one reason to compare both plans before your deadline.

Your SAVE Deadline: What to Do Now

If you are still on SAVE, your servicer's notice gives you 90 days to choose a new plan. Notices began going out on July 1, 2026, so the earliest deadlines fell at the end of September 2026; your notice has your exact date. If you miss it, you're placed in the Standard or Tiered Standard plan, whose payments aren't based on income. The Department says you can contact your servicer at any time to enroll in another plan. The repayment plan chooser on this site shows which plans your loans qualify for and estimates each one's monthly payment.

Before your deadline:

1. 1 Find your exact deadline: log in to your loan servicer account or check the notice your servicer sent
2. 2 Compare IBR and RAP using the RAP vs. IDR Comparator on this site with your actual AGI and family size — IBR can be lower for incomes near the poverty line, and RAP's interest waiver helps if your payment won't cover interest
3. 3 Treat ICR and PAYE as short-term options only: they close to existing borrowers on July 1, 2028, so you would have to switch again
4. 4 If you are pursuing Public Service Loan Forgiveness (PSLF), pick an income-driven plan such as IBR or RAP and confirm with your servicer that your payments will count toward the 120 required. Payments under the Tiered Standard Plan don't count
5. 5 Apply through the income-driven repayment application on StudentAid.gov or through your servicer, and keep a screenshot or confirmation of your submission

Who Benefits Most From RAP

RAP can work better than the older plans in these situations:

Borrowers with high balances and moderate incomes

Because RAP payments are based entirely on AGI rather than balance, borrowers with $80,000+ in debt but only $45,000 in income pay the same as a borrower with $20,000 in debt at the same income level. High-balance borrowers get the principal guarantee and interest waiver benefits while making a payment scaled only to their earnings.

Graduate and professional degree borrowers

Graduate borrowers often carry large balances, and new graduate loans can be repaid only under RAP or Tiered Standard. Because RAP's rate tops out at 10% of AGI, the payment tracks income rather than the balance.

Borrowers with dependent children

The $50/month per-dependent reduction is a meaningful benefit for families. A household with three dependents and $60,000 AGI would see its $250/month RAP payment reduced by $150 to $100/month. Earlier IDR plans also accounted for family size through the poverty-line threshold, but RAP's flat deduction makes the effect easy to predict.