The SAVE repayment plan has been officially discontinued, and borrowers are now facing a transition period to select new repayment options. The Department of Education has announced that borrowers will receive individual notices starting July 1, 2026 with the first tranche of notifications being sent out on that date. This transition affects almost 7 million borrowers who will need to choose from available repayment plans within a 90-day window.
The cancellation of the SAVE plan follows a court settlement and the introduction of the One Big Beautiful Bill which eliminates the SAVE plan as an option. Borrowers will need to select from the StandardTiered StandardIBRRAPPAYE or ICR plans. The Department of Education is encouraging borrowers to enroll in auto-payment, offering a temporary increase in the autopay discount from 0.25% to 1.00% interest rate reduction.
Timeline for Borrower Notifications
The Department of Education will send out notifications in tranches, approximately every two weeks. The estimated timeline for these tranches is as follows:
- Tranche One July 1, 2026
- Tranche Two July 15, 2026
- Tranche Three July 29, 2026
- Tranche Four August 12, 2026
- Tranche Five August 26, 2026
- Tranche Six September 9, 2026
- Tranche Seven September 23, 2026
- Tranche Eight October 2, 2026
Each tranche will include approximately 750,000 borrowers, ensuring a manageable transition process. The final deadline for all borrowers to switch plans is December 31, 2026.
Available Repayment Plan Options
Borrowers have several repayment plan options to choose from:
- Standard Plan A traditional repayment plan with fixed monthly payments.
- Tiered Standard Plan Launches on July 1, 2026, offering a tiered repayment structure.
- IBRRAP Launches on July 1, 2026, providing income-based repayment options.
- PAYE Ends in 2028, offering pay-as-you-earn repayment options.
- ICR Ends in 2028, providing income-contingent repayment options.
If borrowers fail to select a repayment plan within the 90-day window, they will be automatically enrolled in the Standard or Tiered Standard Plan, depending on their eligibility. Monthly billing will resume under this plan immediately after the 90 days.
Choosing the Best Repayment Plan
Selecting the right repayment plan is crucial for borrowers. For many, enrolling in an income-driven repayment plan like IBR will be the best choice, offering both manageable payments and a pathway to loan forgiveness. New borrowers may find the Repayment Assistance Plan (RAP) compelling, with potentially lower payments and interest subsidies. However, RAP extends the forgiveness timeline to 30 years.
Borrowers pursuing Public Service Loan Forgiveness (PSLF) should choose the plan that offers the lowest repayment costs, as the PSLF timeline is separate. For those looking to repay their loans quickly, the Standard plans are ideal, ensuring fully amortized payments and the ability to make additional principal payments.
Now that the timeline for switching repayment plans is clear, borrowers in the SAVE plan should use tools like The College Investor’s Student Loan calculator to run the numbers and make an informed decision. It’s essential to act promptly and avoid default by selecting a suitable repayment plan before the deadline.
