A federal court officially ended the SAVE Plan on March 10, 2026, following a settlement between the U.S. Department of Education and the state of Missouri. If you're one of the 7.5 million borrowers enrolled in SAVE, you need to switch repayment plans. The deadline pressure starts July 1, 2026, when loan servicers begin sending 90-day notices. Borrowers who do not switch within 90 days will be automatically moved to the Standard Repayment Plan.

What Just Happened

On March 10, 2026, a court order formally terminated the SAVE (Saving on a Valuable Education) Plan. The Department of Education and the state of Missouri reached a legal settlement ending the program, which had enrolled more borrowers than any income-driven repayment plan in history.

The Washington Post reported on March 27, 2026, that the Department had begun issuing guidance to SAVE borrowers directing them to exit the plan before automatic transitions kick in.1 The Department's official press release confirmed that starting July 1, 2026, loan servicers will issue formal 90-day notices to every SAVE borrower.2

If you don't act on that notice within 90 days, you'll be automatically placed on either the Standard Repayment Plan or the new Tiered Standard Plan — potentially a much higher monthly payment than you've been making.

Who This Hits Hardest

Nearly half of SAVE's 7.5 million borrowers qualified for $0 monthly payments because their incomes were low enough. Those borrowers face the steepest jump when the automatic transitions happen. If you've been paying nothing because of SAVE, you need to act now — not when the notice arrives.

Borrowers working toward Public Service Loan Forgiveness have an additional problem: payments on SAVE no longer count as qualifying PSLF months. You must switch to a different income-driven repayment plan to get qualifying payment credit again.

If you take out any new federal loan on or after July 1, 2026, the new Repayment Assistance Plan (RAP) becomes your only income-driven option for ALL your loans — including older ones you may currently have on IBR. Mixing new and old loans under the new rules can eliminate your legacy plan protections.

Your Options After SAVE

Income-Based Repayment (IBR) is the only legacy income-driven plan that continues accepting new enrollees after July 1, 2026. PAYE and ICR stop accepting new borrowers on July 1, 2026, and both plans sunset entirely on July 1, 2028.

The new Repayment Assistance Plan (RAP) launches July 1, 2026. Here's how it works, based on information published by the National Association of Student Financial Aid Administrators and state financial aid agencies:3

  • Payments are set at 1% to 10% of your total adjusted gross income (not discretionary income, which is how older plans worked)
  • Minimum payment is $10/month — SAVE allowed $0 for low-income borrowers
  • $50 per dependent is subtracted from your monthly payment
  • Unpaid interest is canceled each month so your balance cannot grow if you make payments
  • Up to $50 of each payment goes to principal reduction
  • Forgiveness comes at 30 years for all loans — undergraduate and graduate alike. Under older plans, undergrad forgiveness was at 20 years.

If you're comparing your options, our guide to income-driven repayment plans walks through the tradeoffs between IBR and RAP in detail.

What to Do Right Now

Step 1: Log into studentaid.gov and confirm which repayment plan you're currently on. If it says SAVE, you need to enroll in a different plan.

Step 2: Compare IBR and RAP using your actual income. For many borrowers — especially those with low incomes or many dependents — IBR may produce a lower monthly payment than RAP. For borrowers closer to income thresholds, RAP's interest cancellation feature may matter more. Our guide to understanding student loan repayment plans explains the math.

Step 3: If you're pursuing PSLF, switch to an IBR plan immediately and call your servicer to verify that your PSLF payment count will resume. Do not wait for the July 1 notice.

Step 4: Know the Grad PLUS connection. If you're a graduate student borrowing, the Grad PLUS loan program is also ending July 1, 2026. These changes are happening simultaneously, and they compound each other.

Step 5: Check how much you're borrowing total. The bigger your loan balance, the more these repayment plan choices matter long-term. Our guide to how much student debt is too much can help you think through this.

The Broader Context

SAVE was created in 2023 as the most generous income-driven repayment plan the federal government had ever offered. It was immediately challenged in court by Republican-led states. The program operated in legal limbo for nearly three years before the March 2026 settlement ended it.

The replacement — RAP — offers some of the same interest-cancellation protections but at a higher minimum payment and a longer forgiveness timeline. For borrowers who were paying $0 under SAVE, the transition will be jarring. For borrowers with moderate incomes who were already making payments, the difference may be manageable.

If you're still deciding how to pay for school in the first place, see our guide to federal vs. private student loans before signing anything.

Footnotes

  1. Meckler, L. (2026, March 27). Biden's SAVE plan ending, payments due. The Washington Post. https://www.washingtonpost.com/education/2026/03/27/biden-save-plan-ending-payments/ ↩

  2. U.S. Department of Education. (2026, March). U.S. Department of Education announces next steps for borrowers enrolled in unlawful SAVE Plan. ED.gov. https://www.ed.gov/about/news/press-release/us-department-of-education-announces-next-steps-borrowers-enrolled-unlawful-save-plan ↩

  3. National Association of Student Financial Aid Administrators. (2025). Federal student aid changes from the One Big Beautiful Bill Act. NASFAA. https://www.nasfaa.org/uploads/documents/Federal_Student_Aid_Change_OB3.pdf ↩