If you’re one of the millions of borrowers who enrolled in the SAVE plan, you’re now facing a decision you didn’t ask for.  SAVE borrowers are receiving individual notices with roughly 90 days to choose a new repayment plan. If you don’t choose, you’ll likely be defaulted onto a fixed standard plan, and your monthly payment could jump significantly.

The good news: you have some legacy and new options to consider.  Making the right decision can still save you thousands of dollars and years of repayment. Here’s what’s changed, what’s closing, and how to think through the decision.

What’s Actually Changing

Most of the OBBB’s student loan provisions took effect on July 1, 2026. The new Repayment Assistance Plan (RAP) is available.  Depending on your situation, this could be a great alternative to the legacy Income-Driven Repayment (IDR) options.

For SAVE borrowers specifically, the relevant question is: which plans can you move into, and how soon do you need to decide?  Here is a table comparing the IDR plans available to SAVE borrowers.

Knowing your IRS Income Data on File is Critical

For many SAVE borrowers, the income used in their payment calculation was from tax year 2019. In addition, income recertification and minimal payments have been required since COVID.  So, before you start looking at your options, you need to know what IRS tax data is on file with the IRS and the Department of Ed.  An IRS data integration started a few years ago with the FAFSA and now is being used in the student loan repayment process.

For most borrowers, income has gone up, which would explain some of the increase in payment amounts, along with the change in calculation methods.  The SAVE calculation was the most generous IDR calculation and the reason for it being considered unconstitutional.

Beyond income increases, the most common borrowers with an income issue are those who got married since COVID, and only one spouse has federal student loans.  You likely filed married filing jointly because it is the most cost-effective tax decision, but not for IDR student loan repayment.  You should do a proper analysis before selecting a new repayment option.

Knowing the income, you’ll use for the new calculation and enrollment is critical in the IDR decision-making process.  Most tax professionals don’t understand the tax relationship with IDR methods because their primary goal is to lower your tax exposure.  Getting the right advice from a PayForEd advisor or a student loan repayment expert is important.

The chart shows how important tax-filing decisions are when borrowers use any IDR option.

The Plans Still on the Table

RAP (Repayment Assistance Plan) is the new income-driven option. It sets your payment as a percentage of your adjusted gross income, stepping from 1% to 10% depending on income range, with no cap and only a child dependent adjustment. Balances are forgiven after 30 years of qualifying payments. The biggest advantage is that your loan balance does not go up, unlike all the legacy options.  The legacy repayment options add the monthly unpaid interest to the existing loan balance.

RAP waives unpaid interest your payment doesn’t cover, and kicks in up to $50 extra toward principal in months when your payment doesn’t reduce your balance by that much. One catch: both protections apply only to on-time payments. Paying ahead of schedule can advance your due date and cause you to miss out, so if you want to keep the benefit, you can typically decline to have extra payments advance your due date.

IBR (Income-Based Repayment) is the legacy plan that survives the OBBB changes. It calculates your payment at 10% or 15% of discretionary income (depending on when you originally borrowed), forgives your balance after 20 or 25 years, and — unlike RAP — caps your monthly payment at what you’d owe under the standard 10-year plan. What keeps IBR available to you isn’t a deadline; it’s whether you take out new federal loans. Borrowers who don’t add new Direct Loan debt keep access to it indefinitely.

PAYE and ICR are still open for new enrollment, but only until July 1, 2027, and both plans retire entirely no later than July 1, 2028.  These plans benefit borrowers with at least one loan before July 1, 2014.

Older borrowers face another transition after June 30, 2028, which will most likely increase your payment since you will need to move to Old IBR, which uses a higher income factor.  This is a reason to enroll quickly so borrowers can earn forgiveness credit months at a lower payment amount.

The Tiered Standard Plan is a new fixed-term option: 10, 15, 20, or 25 years depending on your balance.  It’s the only fixed repayment option if you have at least one Direct Loan disbursed on or after July 1, 2026.  The legacy fixed options are not available to SAVE borrowers after June 30, 2026.

Some older loan borrowers need to review this option, especially if you are planning for IDR forgiveness.  Older loan borrowers are limited to higher-paying and longer repayment forgiveness periods.

IDR and Original Loan Date Determine Your Options

Whether you’re limited to RAP and Tiered Standard, or can still choose RAP, IBR, and your current plan, depends on your loan disbursement dates. If every loan you hold predates July 1, 2026, you can stay put, move to IBR, or opt into RAP.  SAVE borrowers do not have access to the Legacy Fixed options.

If you’ve received even one Direct Loan on or after that date, your entire portfolio, including older loans currently on IBR, PAYE, or ICR, moves with you into a choice between RAP and Tiered Standard only.  A Direct Consolidation Loan counts as a new loan for this purpose, which is worth knowing before you consolidate.  For consolidations prior to June 30, 2026, use the loan dates of the loan inside the consolidation to determine which IDR options are available.

Weighing IBR Against RAP

If you are comparing IBR or RAP, the price risk is very different. IBR payments are capped with a shorter forgiveness timeline (20–25 years vs. RAP’s 30).  This generally favors borrowers with growing incomes over $100,000. RAP’s percentage-of-AGI formula, with no cap, can produce higher payments for higher earners, but its interest waiver and principal-match features offer real protection for borrowers whose payments don’t fully cover accruing interest. This would favor high-debt borrowers with incomes below their federal debt amount.  There’s no single right answer; it depends on your income trajectory, loan balance, and how much certainty you want in your monthly payment.

What Happens to Your Payment Count When You Switch

This is where a lot of borrowers get tripped up, because credit toward forgiveness doesn’t move symmetrically.

• Moving into RAP, your payment history generally follows you. Months paid under IBR count toward RAP’s 360-payment clock, as do payment months under ICR, PAYE, or SAVE made before July 1, 2028.
• Months spent in SAVE’s administrative forbearance don’t count. A forbearance isn’t a payment, so if your recent SAVE history is mostly forbearance rather than billed payments, your actual credited months count may be lower than you’d expect. It’s worth checking before you assume everything transfers.  For SAVE borrowers pursuing PSLF, there is a buyback option.  The buyback plan has a significant backlog, so be careful before depending on that option.
• Moving out of RAP is where credit can be lost. Months paid under RAP generally don’t count toward forgiveness under IBR, PAYE, or ICR if you switch away later — the narrow exception being a month where your RAP payment happened to equal or exceed the 10-year standard amount.
• PSLF is the exception to the exception. Months under RAP count toward Public Service Loan Forgiveness regardless, and that credit keeps counting even if you later move back to IBR.

A Warning for PSLF Borrowers

If you’re pursuing Public Service Loan Forgiveness, the Tiered Standard Plan deserves extra scrutiny. A plan only qualifies for PSLF credit if its monthly payment is at least what you’d owe on the 10-year standard plan. Of the four Tiered Standard terms, only the 10-year tier (for balances under $25,000) clears that bar.  The 15-, 20-, and 25-year tiers charge less than the 10-year standard amount and will not count.

Both the Department of Education and the National Consumer Law Center have said plainly that Tiered Standard payments don’t qualify for PSLF, without exception for the 10-year tier. If new borrowing has pushed you onto Tiered Standard and you’re counting on PSLF, confirm your specific tier’s treatment with your servicer.  Your ten-year standard is established at the start of your loan repayment.  A consolidation will reset the 10-year standard.

It is important to recognize that, prior to OBBB, the non-compliant Income Recertification process would default you to the ten-year standard.  Now, non-compliance will default you to the Tier Standard, where those payments may be less than what is required to earn a PSLF credit month.

What About PAYE and ICR Borrowers Down the Road?

If you’re currently on PAYE or ICR rather than SAVE, you have more runway, but the same decision is coming. If you make no election by July 1, 2028, you’ll be defaulted onto RAP, or onto IBR if RAP can’t accept your loans (mainly Direct Consolidation Loans that repaid a Parent PLUS loan).

The Department of Education hasn’t yet published exactly how that transition will run. Given that the difference between a 30-year RAP clock and IBR’s 20–25 year timeline compounds over years, it’s worth planning deliberately well before the deadline rather than waiting to be placed automatically.

StudentAid.gov System Capacity Concerns

These repayment changes can be made on StudentAid.gov.  Since late June, the StudentAid.gov site has been slow and at times down, which is frustrating.  About 7 million borrowers need to make changes before December 1, 2027.

Starting on October 1, the FAFSA season starts for the Department of Ed and college financial aid.  This could place significant strain on Department of Ed systems.

In addition to the system processing speed, the Department of Ed has announced multiple system calculation errors.  Some borrowers may need to resubmit or see changes to their initial payment change.  It is good to get a second opinion.

SAVE Conversion – Putting It All Together

Because these rules interact, disbursement dates determine eligibility, payment history rules differ by direction, and PSLF has its own qualifying test. It helps to see all your loans and options laid out in one place rather than working through the math by hand.  Loan servicers are limited to minimal tax and income advice, which is critical to the decision.

Tools like PayForEd’s Student Loan Repayer import your federal loan details from studentaid.gov (using the MyStudentData.txt export file), summarize your current debt and interest, and lay out every repayment option.  For those with tax-filing concerns, it provides a clear, easy-to-understand comparison by repayment method.  It shows both legacy and the new options side by side, with both short-term monthly payment estimates and long-term forgiveness projections reflecting the OBBB rule changes.

Whatever tool you use, the key is not to let the decision default. If you’re on SAVE, your window is roughly 90 days from your notice.