Personal Finance: SAVE Is Ending, Which Student Loan Repayment Plan Should You Choose?

Former SAVE borrowers have just 90 days to choose a new repayment plan. Here’s how IBR and RAP compare at different incomes and loan balances—and what borrowers should consider before their deadline.

Millions of federal student-loan borrowers who enrolled in the SAVE repayment plan are being forced to choose a replacement. A federal court order ended SAVE on March 10, 2026, and servicers began notifying affected borrowers this summer that they have 90 days from the date of their individual notice to select another repayment plan. Borrowers who do nothing can be automatically transferred into Standard or the new Tiered Standard repayment plan rather than an income-driven plan. The transition comes amid broader changes in federal education policy and administration, making it particularly important for borrowers who organized their finances around SAVE to actively choose a replacement rather than simply accepting an automatic assignment.

The guidance below assumes a fairly typical borrower: single, no children or other dependents, no Parent PLUS loans, and federal loans issued before July 1, 2026. Borrowers who received a new federal loan on or after July 1, 2026 face different rules; RAP is generally their only income-driven repayment option. The examples also use the 2026 poverty guideline for a one-person household in the 48 contiguous states and Washington, D.C.; Alaska and Hawaii have different guidelines.

Which plan should you consider — and what might you pay?

Two plans deserve particular attention: Income-Based Repayment (IBR) and the new Repayment Assistance Plan (RAP).

IBR generally charges 10% of discretionary income for newer borrowers or 15% for older borrowers, with discretionary income based on AGI above 150% of the applicable poverty guideline. For a single borrower in the contiguous United States in 2026, the poverty guideline is $15,960, meaning the first $23,940 of income is excluded from the 10% IBR calculation. IBR payments also cannot exceed what the borrower would have paid under the applicable 10-year Standard plan.

RAP works differently. Its payment is based directly on AGI, using percentages ranging from 1% to 10%, divided into monthly payments, with a $10 monthly minimum. Unlike IBR, RAP’s payment does not depend on whether the borrower owes $20,000 or $40,000. RAP also provides an unpaid-interest subsidy and, for qualifying full and on-time payments, a principal-payment match. Remaining balances can be forgiven after 30 years of qualifying payments.

For comparison, consider two borrowers with approximately 5% interest rates: one owes $20,000, while the other owes $40,000. Their approximate 10-year Standard payments—and therefore approximate IBR ceilings—would be about $212 and $424 per month, respectively.

Our starting recommendations

Income under $30,000 — Look at IBR first. A single borrower with income at or below approximately $23,940 could have a $0 payment under 10% IBR, while RAP requires at least $10. At $25,000, 10% IBR would be only about $9/month, compared with approximately $42 under RAP. At $30,000, both come out near $50/month. At these incomes, whether the borrower owes $20K or $40K generally doesn’t change the immediate comparison because neither IBR payment has reached its loan-balance-based ceiling.
Income $30,000–$50,000 — Look at RAP first, but compare IBR. At $40,000, RAP is approximately $100/month, while 10% IBR would be about $134/month. At $50,000, RAP is approximately $167, while the normal 10% IBR calculation would be about $217. For someone owing only $20,000, however, IBR would be limited by the roughly $212 Standard-payment ceiling. RAP still has the advantage in this example, but the smaller balance is beginning to matter.
Income $50,000–$100,000 — Compare both, because loan balance becomes very important. At $60,000, RAP is approximately $250/month. A 10% IBR calculation would be about $301, but someone owing $20,000 could instead hit the approximately $212 IBR ceiling, making IBR potentially cheaper; someone owing $40,000 could still pay around $301 under IBR, making RAP cheaper. At $80,000, RAP rises to approximately $467/month. At that point, the approximate IBR ceilings of $212 on a $20K balance and $424 on a $40K balance could make IBR less expensive for both borrowers.
Income $100,000–$150,000 — Look at IBR first. RAP is approximately $750/month at exactly $100,000, because that income falls in RAP’s 9% bracket. Above $100,000, RAP uses 10% of AGI: approximately $1,000/month at $120,000 and $1,250/month at $150,000. By contrast, an eligible IBR borrower in our examples would be limited by the applicable Standard-payment ceiling—roughly $212/month with $20K owed or $424/month with $40K owed. At these higher incomes, that IBR ceiling can become extremely valuable. RAP’s official income brackets run from 1% through 10% of AGI, with the 10% bracket beginning above $100,000.

The quick version

Under $30K income: IBR first → RAP second.
$30K–$50K: RAP first → IBR second.
$50K–$100K with about $20K owed: Pay particular attention to IBR, especially as income reaches roughly $60K and above.
$50K–$100K with about $40K owed: RAP may be cheaper toward the lower part of the range; IBR becomes increasingly attractive as income approaches roughly $80K and above.
$100K–$150K with either balance: IBR deserves the first look because its payment ceiling can be substantially below RAP.

These are estimates and starting points, not individual financial advice or guaranteed payment quotes. In particular, borrowers subject to the older 15% IBR formula can get different results from the 10% IBR examples above. Federal Student Aid identifies a “new borrower” for 10% IBR generally by reference to loans first made on or after July 1, 2014 or having no outstanding balance when taking a new loan on or after that date.

Why would someone choose RAP if IBR is cheaper?

RAP has some genuine advantages that shouldn’t be overlooked simply because another plan produces a smaller monthly bill.

If the required RAP payment doesn’t cover the interest accruing that month, the unpaid portion is subsidized rather than being allowed to increase the balance. And when a borrower’s full and on-time payment doesn’t reduce principal by at least $50, the government can make a matching principal payment so that principal is reduced by at least the amount the borrower paid, up to $50.

The tradeoff is time: RAP generally requires 30 years of qualifying payments before ordinary remaining-balance forgiveness. IBR generally provides forgiveness after 20 years for qualifying newer borrowers or 25 years for others. IBR also has the possibility of a $0 payment and, importantly for higher-income borrowers or those with relatively small balances, the Standard-payment ceiling.

PAYE can still be attractive to some eligible borrowers with older loans, but PAYE is scheduled to end no later than July 1, 2028, requiring those borrowers to choose another repayment plan at that point. For someone already being forced out of SAVE in 2026, that possibility of another transition deserves consideration.

There is also one particularly important warning:

Do not consolidate older loans merely to make this transition easier without first checking the consequences.

Federal Student Aid says borrowers with eligible loans disbursed before July 1, 2026 can continue to have access to legacy plans including IBR, PAYE and ICR, subject to each plan’s eligibility requirements. Receiving a new loan on or after July 1, 2026 eliminates access to those legacy plans, leaving RAP as the income-driven option. Servicer guidance also warns that borrowers who consolidate existing loans on or after July 1, 2026 can become subject to the new RAP/Tiered Standard framework.

When will payments actually start?

Applying for another repayment plan does not mean a payment is due the day the application is submitted.

Once the servicer processes the repayment-plan change, borrowers should watch for a new billing statement showing the repayment plan, payment amount and first due date. Federal Student Aid says a payment cannot be due sooner than 21 days after the servicer sends the billing statement.

So borrowers shouldn’t assume that applying on October 10 means they will owe their first payment on October 10—or that their first payment will necessarily occur exactly when the 90-day period expires. The servicer’s processing and subsequent billing statement determine the actual due date.

After applying, watch both email and the online servicer account. When the new bill appears, verify that it shows the repayment plan selected and approximately the payment expected.

Don’t miss your 90-day deadline

Servicers confirm that SAVE borrowers must make the switch within 90 days of the date of their individual notice. Borrowers who fail to select another plan can be automatically placed into Standard or Tiered Standard repayment.

Choosing IBR or RAP now generally doesn’t lock a borrower into that plan forever: eligible borrowers can request a different repayment plan later as their income, loan balance or circumstances change.

For the notice dates many borrowers received:

July 1 notice → 90-day point September 29: If you haven’t selected a plan, act immediately.
July 15 notice → 90-day point October 13: Apply now.
July 29 notice → 90-day point October 27: Aim to apply by approximately October 13.
July 30 notice → 90-day point October 28: Aim to apply by approximately October 14.

If the actual servicer notice provides a specific deadline, use the date in that notice. The dates above are calculated from the 90-day period and shouldn’t override an individually stated servicer deadline.

Waiting deliberately until Day 90 simply to preserve a few additional days before the transition creates unnecessary risk if there is a problem with the application.

The bottom line

Former SAVE borrowers don’t need to become experts on the entire federal student-loan system before making this decision.

For the typical single borrower with no dependents and older federal loans, the starting strategy can be simplified:

Very low income? Consider IBR first. Your payment can adjust as your income changes, and you can generally switch plans later if another eligible plan becomes a better fit.
Around $30K–$50K? Give RAP a close look. If your circumstances change later, you can generally reconsider your repayment-plan choice.
Between $50K and $100K? Compare both—and pay attention to how much you owe. The better option can change as your income changes.
Above $100K? Examine IBR’s payment ceiling carefully before choosing RAP. If your income later falls significantly, reevaluate your options.
This isn’t necessarily a permanent choice. Eligible Direct Loan borrowers can generally change repayment plans later, but don’t take out a new federal loan or consolidate after July 1, 2026 without checking the consequences first.
Don’t miss the 90-day deadline. The ability to change plans later isn’t a reason to risk automatic placement into Standard or Tiered Standard repayment.

Use the Federal Student Aid Repayment Calculator to compare the actual payment offered under the two most likely plans rather than trying to investigate every possible repayment program.

Then make the selection before the individual deadline and save the confirmation. When the first bill arrives, check that the servicer placed the loans into the plan selected and that the payment is reasonably close to the amount expected.

For borrowers who trusted SAVE to provide a predictable income-based payment, having to make another choice may be unwelcome. But the immediate objective is relatively straightforward: identify the best candidates based on your income and balance, compare their actual quoted payments, make the choice before the deadline, and keep documentation of what you selected.

Important Calculator Tip: Before choosing a repayment plan, make sure you’ve entered the correct original loan disbursement dates. In one real-world comparison, omitting the disbursement date caused the calculator to show IBR as unavailable and recommend RAP instead. Once the borrower entered the correct 2021 disbursement date, IBR appeared with a $0 estimated monthly payment, compared with $14 under RAP. Check your loan details on StudentAid.gov before accepting a calculator recommendation.

TIP: Multiple Student Loans? You Usually Need Just One Application.

If you have several federal Direct Subsidized and Unsubsidized Loans—even 10 or 14—you generally only need to submit one income-driven repayment application through StudentAid.gov to enroll your eligible loans in IBR or RAP. You do not need to apply separately for each loan or consolidate them. After approval, check your loan servicer’s account dashboard (such as Edfinancial) to confirm that all eligible loans are covered by the new repayment plan.

This article provides general consumer information, not individualized financial, tax or legal advice. Payment estimates are illustrative and can vary based on loan history, interest rate, IBR eligibility, location and other factors.