If you are one of the 7.5 million borrowers parked in the SAVE plan, your $0 or rock-bottom payment is ending. SAVE is finished, the courts settled it, and starting July 1 your servicer will give you 90 days to pick a new plan or get moved to one you did not choose.
SAVE was blocked repeatedly in court and then ended through a settlement between the Education Department and the State of Missouri. The Department has told all 7.5 million SAVE borrowers to exit and enroll in a legal plan. From July 1, 2026, two new options open: the Repayment Assistance Plan (RAP) and a Tiered Standard plan, both created by the Working Families Tax Cuts Act.
Here’s the part worth your attention. Under RAP, your monthly payment is 1% to 10% of your income, minus $50 for each dependent. Make your payments on time and the plan waives the unpaid interest that would otherwise pile up, and it adds up to $50 a month toward your principal if your payment did not cover that much. The Department’s own example: a single borrower earning $45,000 with $35,000 in debt paid $176 a month under the old plans, and $150 under RAP, with $40 of interest waived each month on top.
7.5 million borrowers are being moved off SAVE, with a 90-day window to choose a new plan starting July 1 (U.S. Department of Education).
So who wins and who pays more? For lower earners and parents, RAP will often cost less than the old plans and actually shrink the balance, because the interest waiver kills the cycle where you pay for years and still owe more than you borrowed. For anyone who had a $0 SAVE payment, the bill is going up. Capping runaway interest is a real win for the person making payments. But “your payment is changing” plus “you ignored the mail” is how people end up in default. Don’t let the plan get picked for you.
Log in to StudentAid.gov this month and check what you are enrolled in now. When your servicer sends your 90-day notice, do not sit on it. Run your income through the loan simulator and compare RAP, the Tiered Standard plan (fixed 10 to 25 year terms based on your balance), and Income-Based Repayment before you choose. The application takes about 10 minutes, and giving consent to pull your IRS income makes it faster. Miss the window and you get dropped into Standard or Tiered Standard, which may not be your cheapest option.
If your loans were taken out before July 1, 2026, you have until July 1, 2028 to settle on RAP, Tiered Standard, or IBR, so there is room to think. That is not a reason to ignore it. Check the official settlement details at StudentAid.gov/courtactions, file this away if your notice has not arrived yet, then act the week it does.
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