SAVE Is Ending: Should You Choose RAP or IBR in 2026?

The student loan system is going through its biggest restructuring in years. The SAVE plan is being phased out, a new plan called the Repayment Assistance Plan (RAP) takes effect on July 1, 2026, and millions of borrowers will have to make an active choice about how they repay. Here is what is changing and how to think about it.

What is happening to the SAVE plan?

SAVE was introduced to lower or eliminate monthly payments for many borrowers. After legal challenges and the policy changes in the One Big Beautiful Bill Act, SAVE is being wound down. It is not alone: the PAYE and ICR plans are also being phased out. Borrowers on these plans face a transition deadline of July 1, 2028 to move onto a plan that will still exist.

The two income-driven plans that continue are RAP, the new plan, and IBR, the long-standing Income-Based Repayment plan.

How RAP works

RAP calculates your monthly payment as a percentage of your full adjusted gross income. The percentage rises with income — roughly one percentage point for every $10,000 of income — and is capped at 10%. The lowest earners pay a flat $10 a month. From the base amount, you subtract $50 for each dependent, and the payment can never fall below $10.

A few features stand out. RAP prevents negative amortization: if your payment does not cover the interest, the unpaid interest is not charged. It also provides a small principal subsidy so your balance moves down even on a low payment. The trade-offs: RAP uses your full income rather than discretionary income, it has no payment cap, and forgiveness comes only after 30 years.

You can estimate your own RAP payment here:

How IBR works

IBR bases your payment on discretionary income — the portion of your income above a multiple of the federal poverty line — rather than your full income. Payments are capped at what you would pay on the Standard 10-year plan, so a rising income cannot push your IBR payment above that ceiling. Forgiveness comes after 20 or 25 years, depending on when you first borrowed, which is sooner than RAP.

RAP or IBR: who each plan suits

There is no universal answer, but some patterns help.

RAP may suit you if you have a lower income or several dependents, since the dependent reduction and low-income brackets can produce a small payment. It also removes the risk of a ballooning balance, which appeals to borrowers who expect slow income growth.

IBR may suit you if you expect your income to rise substantially. Because IBR payments are capped at the Standard amount and forgiveness arrives earlier, a borrower headed for a high income can pay less over time under IBR than under uncapped RAP. Borrowers pursuing forgiveness who want the shorter timeline also lean toward IBR where they remain eligible.

The honest approach is to run your own numbers under both, at your current income and at the income you realistically expect in five and ten years.

The deadlines that matter

Three dates anchor this transition. July 1, 2026 is when RAP takes effect and becomes the only income-driven plan for new federal Direct Loans. July 1, 2028 is the deadline for borrowers on SAVE, PAYE, and ICR to move to RAP or IBR. And every year, you must recertify your income, which can change your payment.

If you do nothing, a plan may be chosen for you, and it may not be the one that fits your situation. Choosing deliberately, before the deadline, is the single most valuable thing a borrower can do right now.

What to do next

Find out which plan you are currently on by logging into your federal loan account. Estimate your payment under both RAP and IBR. If your loans are already in default, address that first — default has its own recovery process, and wage garnishment resumed in 2026. Then make a deliberate choice and submit it to your servicer rather than letting the default selection decide for you.

This article is general information, not financial or legal advice. Confirm current rules and your eligibility with your loan servicer or at the official federal student aid website before making a decision.