The U.S. Department of Education has begun contacting more than 7 million federal borrowers who were enrolled in the previous SAVE repayment program to prompt them to choose a new plan. Initial messages are informational reminders and will be followed by formal notices from loan servicers. These communications start a mandatory process: if a borrower does not select an alternative, their account will be placed on the Standard Repayment Plan, which is widely regarded as the most expensive monthly option.
The clock for the formal transition begins when servicers issue the official notices. Those notices will start on July 1, 2026 and follow a staggered schedule, with groups contacted roughly every two weeks and long-enrolled borrowers receiving the earliest outreach. The 90-day windows created by those notices are expected to effectively end the SAVE forbearance on September 30, 2026, meaning affected borrowers could resume the Standard Repayment Plan on October 1, 2026 if they take no action.
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What is changing and the timeline
The change traces to legislation and a settlement that removed SAVE, along with other plans, from long-term availability. The One Big Beautiful Bill Act formally sunsets SAVE, PAYE, and ICR by June 30, 2028, while the settlement established a shorter window for borrowers to pick replacement plans. Meanwhile, interest has been accumulating on loans since August 1, 2026, despite pauses in payment requirements earlier; that means balances may have grown with interest compounding through the current transition period. If you miss the servicer’s 90-day notice, you will be moved automatically into the Standard Repayment Plan and could face significantly higher monthly payments.
Available repayment options and key differences
Borrowers will be able to choose among the remaining income-driven plans such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR) while both PAYE and ICR remain scheduled to sunset by June 30, 2028. Beginning July 1, 2026, a new option named the Repayment Assistance Plan will become available. The Repayment Assistance Plan (RAP) sets monthly charges at approximately 1% to 10% of adjusted gross income depending on your outstanding balance, applies a $50 dependent deduction, requires a minimum payment of $10 per month for everyone, and offers forgiveness after 30 years. Importantly, RAP does not include a $0 payment possibility that some borrowers enjoyed under SAVE.
RAP specifics and what to expect
The RAP design aims to scale payments with income, but it changes important features borrowers had under prior plans: no zero-dollar payments, a longer forgiveness timeline, and a mandatory minimum monthly contribution. Because RAP will be available starting July 1, 2026, borrowers considering it should model their expected payments and long-run outcomes—especially if they are working toward Public Service Loan Forgiveness (PSLF) or other forgiveness paths.
Choosing between IBR and PAYE
For borrowers seeking to switch immediately, IBR and PAYE are often the most attractive alternatives today. If you qualify for PAYE, it can be preferable because switching later to RAP is not supposed to trigger interest capitalization under PAYE, whereas leaving IBR may result in capitalized interest. Both IBR and RAP remain eligible for PSLF, so public-sector employees should weigh plan rules carefully to preserve qualifying payment credit.
How to prepare and practical steps
Servicers will deliver the official notices that start the 90-day countdown on July 1, 2026, so take preparatory steps now. First, login to StudentAid.gov and your loan servicer account to confirm your contact information is current; missed emails could result in an automatic shift to the expensive Standard Repayment Plan. Use the federal Loan Simulator at StudentAid.gov to estimate payments across plans based on your income and loan balance. If you need income-driven relief, submit an Income-Driven Repayment Plan Request now rather than waiting for the formal notice; servicers already face processing backlogs and early applicants will be queued ahead of a likely surge.
Beware of scams: free federal tools and your servicer can handle legitimate requests, so avoid paid services that promise fast fixes. If you are pursuing PSLF, act immediately to ensure payments count and to restart any interrupted timelines. Finally, document communications, keep proof of applications, and monitor your account closely once notices begin arriving in waves every two weeks; proactive steps now can prevent higher payments, delinquency, and the risk of default.