Income-Driven Repayment Plans After the SAVE Shutdown: A 2026 Guide

The SAVE plan is gone. As of March 10, 2026, a federal court approved the settlement that ended the Saving on a Valuable Education plan, and the roughly 7.5 million borrowers enrolled in it are now in transition. The Repayment Assistance Plan (RAP) launches July 1, 2026. PAYE and ICR will sunset by July 1, 2028. IBR is the only legacy income-driven plan still accepting new enrollees after July 1, 2026. If you were enrolled in SAVE, your loan servicer will issue a 90-day notice starting July 1, 2026, telling you to pick a new plan or default into Standard Repayment. This post walks through what each plan is, who it’s right for, how PSLF interacts with all of it, and what to do before the deadline pressure starts. If you want the broader 2026 forgiveness landscape first, Finnita covers that in the federal student loan forgiveness 2026 guide.

What each IDR plan is in 2026

Five plans matter right now, and each has a different status.

SAVE is dead. A federal court ended SAVE on March 10, 2026 following a settlement between the Department of Education and the state of Missouri. As NPR’s Cory Turner reported in late 2025, SAVE was the most generous federal income-driven plan in history, with a higher income exemption than any other IDR plan and the shortest path to forgiveness. None of that survives the settlement. SAVE is no longer an option, and time spent in SAVE administrative forbearance does not count as qualifying payments toward PSLF or IDR forgiveness.

RAP launches July 1, 2026. The Repayment Assistance Plan was created by the One Big Beautiful Bill Act, signed July 4, 2025. The Department of Education completed negotiated rulemaking on RAP and the related Tiered Standard Plan in late 2025; the official ED announcement confirms a July 1, 2026 launch. Under RAP, your monthly payment is calculated as 1% to 10% of your total adjusted gross income, with a $10 minimum and a $50 reduction per dependent. Unlike older IDR plans, RAP applies the payment to your full AGI, not your discretionary income. The plan cancels any unpaid interest each month so your balance cannot grow if you pay on time, and up to $50 of each on-time payment is matched against your principal. Forgiveness comes after 360 qualifying on-time, full payments, or about 30 calendar years.

IBR is stable. Income-Based Repayment is the only legacy income-driven plan that continues accepting new enrollees after July 1, 2026. Payments are 10% of discretionary income for newer IBR borrowers, 15% for older ones, with forgiveness after 20 or 25 years depending on when your loans were first disbursed. The OBBBA also eliminated the partial-financial-hardship test, which means borrowers who previously couldn’t qualify for IBR now can. For most borrowers transitioning out of SAVE and pursuing PSLF, IBR is the bridge.

PAYE and ICR sunset July 1, 2028. Pay As You Earn and Income-Contingent Repayment are still available to borrowers currently enrolled in them, and they remain qualifying plans for PSLF through their sunset dates. Both stop accepting new enrollees on July 1, 2026. After July 1, 2028, both plans end. Borrowers still on PAYE or ICR at that point will be auto-enrolled in either RAP or IBR, depending on eligibility. If you take out any new federal loan after July 1, 2026, you lose access to PAYE and ICR immediately, regardless of the sunset schedule.

The Standard Repayment Plan is also available, and a new Tiered Standard Plan launches July 1, 2026 with terms of 10, 15, 20, or 25 years based on your loan balance. Neither standard plan is income-driven, and neither qualifies for PSLF.

Which plan fits which borrower profile

Plan selection in 2026 is not a question of which plan is “best” in the abstract. It depends on your loan balance, your income, your household size, whether you’re pursuing PSLF, and how soon you need monthly payments to be manageable. Three borrower profiles cover most of the decision.

The PSLF-pursuer. If you work in qualifying public service and you’re aiming for the 120-payment finish line, IBR is the safest choice right now. It’s available immediately, it counts for PSLF, and it gives you a full payment history while you wait for RAP. Once RAP launches, you can run the numbers and decide whether to stay or switch. Both plans count for PSLF, but the math is different. RAP payments are calculated on total AGI rather than discretionary income, which often produces a higher monthly number than IBR. A higher monthly payment on RAP means less remaining balance to be forgiven at the 120-payment mark, so for some PSLF borrowers, RAP actually reduces the total benefit. Run the numbers before you switch. Plan selection here is exactly the kind of complex, high-stakes decision a specialist makes better than a borrower working alone.

The low-income borrower who was paying $0 on SAVE. Roughly half of SAVE’s 7.5 million borrowers qualified for $0 monthly payments. Every alternative plan produces a higher number. RAP has a $10 minimum, IBR has a 10% discretionary income payment, and the Standard plans don’t account for income at all. For most low-income borrowers transitioning out of SAVE, IBR usually produces the lowest payment available, but the answer depends on your specific income and family size. The Department of Education’s loan simulator at studentaid.gov lets you model both, and once RAP launches, the simulator will include it.

The borrower who can pay off loans in standard time. If you have a relatively small loan balance and a higher income, an income-driven plan may not be your best math. The Standard Repayment Plan or the new Tiered Standard Plan often costs less over the life of the loan because you pay off the balance before forgiveness would have arrived anyway. The trade-off: standard plans don’t qualify for PSLF, so this profile only applies to borrowers not pursuing public service forgiveness.

How PSLF interacts with each plan

Public Service Loan Forgiveness requires 120 qualifying monthly payments while working full-time for a qualifying government or nonprofit employer. The “qualifying payment” half of that requirement depends on which repayment plan you’re on. The 2026 plan landscape has rewritten which plans count.

Plans that count for PSLF in 2026: IBR, PAYE (through sunset), ICR (through sunset), and RAP once it launches. The Department of Education’s official guidance on the OBBBA confirms RAP qualifies for PSLF, with that provision effective immediately upon enactment. Borrowers will be able to earn PSLF credit under RAP from the day the program launches.

Plans that do not count for PSLF: SAVE no longer counts because the plan is gone. The Standard Repayment Plan and the new Tiered Standard Plan do not qualify. Graduated and Extended plans don’t qualify either.

The PSLF buyback complication. Borrowers who spent time in SAVE administrative forbearance can use the PSLF Buyback program to convert those months into qualifying payments, but only after reaching 120 months of qualifying employment, and only by paying a lump sum for each bought-back month. As of March 31, 2026, the Department of Education changed how it calculates buyback payments. Newsweek reported on April 13, 2026 that the new formula uses IBR, PAYE, or ICR math instead of SAVE math, which produces buyback amounts two to three times higher than what borrowers anticipated. More than 88,000 borrowers have pending buyback applications, and as Robert Farrington of The College Investor noted in his March 25, 2026 PSLF strategy update, most borrowers should keep making qualifying payments under IBR rather than wait for buyback. For a deeper look at why so few borrowers succeed at PSLF on their own, Finnita treats that analysis in a separate post.

For the full mechanics of how PSLF actually works in 2026, including the new employer-eligibility rule and what counts as a qualifying payment, see Finnita’s PSLF guide for 2026.

What SAVE borrowers should do now

If you were enrolled in SAVE, the single most important thing is not to wait passively for the auto-transition. The Department of Education has confirmed that loan servicers will begin issuing 90-day notices on July 1, 2026. Borrowers who do not actively select a new plan within their 90-day window will be moved into the Standard Repayment Plan or the new Tiered Standard Plan automatically, and neither qualifies for PSLF. Here is the sequence:

1. Log into studentaid.gov and confirm your current plan. Verify that you are still listed as enrolled in SAVE and identify which servicer manages your loans. Your servicer is the one that will send your 90-day notice.
2. Decide whether to transition before the notice or wait for it. You can contact your servicer at any time to enroll in a new plan. Acting before the notice arrives gives you more processing time and reduces the risk of running into the deadline.
3. Run the numbers on IBR and RAP. Use the Department of Education’s loan simulator at studentaid.gov to model your monthly payment under each plan. RAP will be added to the simulator at launch. If you are pursuing PSLF, also model how each plan affects your projected forgiveness amount. The monthly payment is only half of the math.
4. Submit your IDR application early. As of February 28, 2026, the Department of Education had a backlog of 576,609 pending IDR applications, with another 7.5 million SAVE borrowers about to transition into the same processing queue. Submitting now reduces the chance your application is still in processing when the 90-day deadline runs out.
5. If you are pursuing PSLF, do not let the 90-day clock park you in Standard. The auto-transition default does not qualify for PSLF, and any month in a non-qualifying plan is a month that does not count toward your 120.

The 90-day window is not a long time once paperwork is involved. For a deeper walkthrough of what SAVE borrowers should do during the 90-day transition window, Finnita covers that in a separate post.

What borrowers taking new loans after July 1, 2026 face

Borrowers who take out any federal student loan first disbursed on or after July 1, 2026 face a narrower set of repayment options and one provision that catches most people off guard.

Two plans only for new borrowers. Any Direct Loan first disbursed on or after July 1, 2026 is eligible for the Tiered Standard Plan or RAP, and nothing else. PAYE, ICR, and IBR are unavailable for these loans.

The cross-contamination rule. This is the trap. If you have older loans currently on IBR and you take out a new loan after July 1, 2026, all of your loans, old and new, get pulled into RAP. Your IBR access on the older loans is lost permanently. For PSLF-pursuers, this can mean a higher monthly payment for the rest of your repayment timeline and a smaller forgiveness amount at the 120-payment mark. The rule applies to any new federal borrowing, including a Direct Consolidation Loan completed on or after July 1, 2026.

Parent PLUS borrowers face a separate deadline. Parent PLUS loans first disbursed on or after July 1, 2026 will not be eligible for any income-driven plan, including RAP, and therefore will not be eligible for PSLF. Existing Parent PLUS borrowers who want to preserve income-driven and PSLF access must complete a Direct Consolidation Loan and enroll in IBR before July 1, 2026. The Department of Education recommends starting the consolidation process by April 1, 2026 because consolidation processing typically takes 30 to 90 days.

Why Finnita

Plan selection in 2026 is not a single decision. It is a chain of decisions: which plan to enter now, when to switch to RAP if at all, how PSLF math shifts when the formula changes, what consolidation does to your eligibility, and whether your spouse’s income or filing status changes the answer. The Department of Education’s own loan simulator gives you payment estimates. It does not tell you what to choose, and it does not file the paperwork.

Finnita does. Finnita is a student loan enrollment service that focuses on one thing: getting borrowers correctly enrolled in the federal repayment and forgiveness programs they qualify for, then managing annual recertification so they stay enrolled. Customers save an average of $468 per month across all enrolled customers. Finnita’s enrollment success rate across all customers and all programs is 98%, compared with the roughly 11% of borrowers who succeed on their own. The service is free to employers, and Finnita is a Delaware Public Benefit Corporation that does not refinance federal loans.

No refinancing. No credit checks. No new debt.

Get started at finnita.com.

FAQ

Is the SAVE plan really gone, or is it just paused?

SAVE is gone. The plan was ended by court order on March 10, 2026 following a settlement between the Department of Education and the state of Missouri. The Department has begun directing all 7.5 million SAVE borrowers to enroll in another repayment plan. SAVE is not on pause and is not expected to return.

Should I switch to IBR now or wait for RAP in July?

For most borrowers pursuing PSLF, IBR is the safer choice in the immediate term because it is available now and produces qualifying PSLF payments today. Once RAP launches July 1, 2026, you can model both plans and decide whether to switch. RAP often produces a higher monthly payment than IBR because it is calculated on total AGI rather than discretionary income, which can reduce the total benefit at 120 payments.

Will my PSLF progress reset when I leave SAVE?

No. Qualifying PSLF payments you made before SAVE remain on your count. Time spent in SAVE administrative forbearance does not count and is not retroactively converted when you switch plans. If you have time in SAVE forbearance and you eventually reach 120 months of qualifying employment, the PSLF Buyback program may convert those months, though buyback costs increased significantly under the March 31, 2026 formula change.

What happens if I do nothing when my 90-day servicer notice arrives?

You will be automatically moved into the Standard Repayment Plan or the new Tiered Standard Plan. Neither plan qualifies for PSLF. For most borrowers, the auto-transition produces a substantially higher monthly payment than IBR or RAP, particularly for borrowers who were paying $0 on SAVE. If you are pursuing PSLF, every month spent in a non-qualifying plan is a month that does not count toward your 120.

Can I switch back to my old plan if I take out a new loan after July 1, 2026?

No. Any federal student loan first disbursed on or after July 1, 2026, including a Direct Consolidation Loan, pulls all of your federal loans into RAP, even loans you previously had on IBR or another legacy plan. The change is permanent. For borrowers actively pursuing PSLF, this is the single most consequential gotcha of the 2026 transition.