7.5 Million Borrowers Are Being Moved Off SAVE. The Clock Is 90 Days From the Notice.
The Repayment Assistance Plan opened on July 1. Borrowers who do not choose a plan within 90 days of their servicer's notice are placed in the Standard or Tiered Standard Plan.
The short answer
- The Department of Education said servicers would begin issuing exit notices on July 1, 2026 to the 7.5 million borrowers enrolled in the SAVE plan.
- Each borrower has 90 days from their own servicer's notice to select a new plan. Those who do not are placed in the Standard Repayment Plan or the Tiered Standard Plan.
- The Repayment Assistance Plan charges between 1% and 10% of adjusted gross income by bracket, with a flat $120 a month below $10,000 of AGI, less $50 for each dependent, and a floor of $10 a month.
- A remaining balance is forgiven after 30 years or 360 qualifying payments. Unpaid interest is subsidised, and if a payment does not cut principal by $50 the Department matches the difference.
The Department of Education is moving 7.5 million borrowers off the SAVE repayment plan. The mechanism is a notice from the loan servicer and a 90-day window to choose something else. Servicers began issuing those notices on July 1, 2026, which means the earliest windows have already closed.
The sequence
- The servicer sends an exit notice. These began going out on July 1, 2026.
- The borrower has 90 days from that notice to select a new repayment plan.
- A borrower who does not choose within the window is placed in the Standard Repayment Plan or the Tiered Standard Plan.
If you take out a loan, you must pay it back.
How the Repayment Assistance Plan calculates a payment
RAP opened for online applications at StudentAid.gov on July 1, 2026. It sets the monthly payment as a percentage of adjusted gross income, and the percentage rises with income.
- AGI of $10,000 or less: a flat $120 a month
- $10,001 to $20,000: 1% of AGI. $20,001 to $30,000: 2%. $30,001 to $40,000: 3%
- $40,001 to $50,000: 4%. $50,001 to $60,000: 5%. $60,001 to $70,000: 6%
- $70,001 to $80,000: 7%. $80,001 to $90,000: 8%. $90,001 to $100,000: 9%
- Above $100,000: 10% of AGI
The result is reduced by $50 for each dependent claimed on a federal tax return, and the payment cannot fall below $10 a month.
What happens to interest and principal
Two features change what a payment does to the balance. If the monthly payment is smaller than the interest that accrued, the unpaid interest is subsidised rather than capitalised. And if a payment does not reduce principal by at least $50, the Department matches the difference as a principal payment. A remaining balance is forgiven after 30 years, or 360 qualifying payments.
Who is eligible, and what else is on the menu
RAP is open to Direct Loan borrowers. Parent PLUS loans, and consolidation loans containing them, are excluded. The other destination the Department names is the Tiered Standard Plan, with a term of 10, 15, 20 or 25 years set by loan balance.
Why it matters
Doing nothing is a choice with a default outcome attached. A borrower who lets the 90 days run out lands in a Standard or Tiered Standard Plan, where the payment is set by balance and term rather than by income. The figures above are the arithmetic; which plan fits a given household depends on income, dependents, loan type and forgiveness eligibility, and the servicer notice is where the individual dates appear.
Sources
- U.S. Department of Education Announces Next Steps for Borrowers Enrolled in the SAVE Plan — U.S. Department of Education
- Repayment Assistance Plan (RAP) - Income-Driven Repayment Information Center — Edfinancial Services / Federal Student Aid
Spotted an error? Tell our corrections desk.