Your Student Loan Plan Is Being Discontinued. Doing Nothing Picks the New One for You.

Devon has been repaying student loans on SAVE, and his plan, the comfortable assumption, was to keep doing exactly what he is doing. That plan no longer exists. SAVE is gone, the rest of the old menu is being retired, and as of 2026 the most dangerous thing Devon can do is nothing, because nothing has a default, and the default may not be his best deal.

(Devon is a composite. The story is illustrative. The math is real and typical.)

What changed

The One Big Beautiful Bill Act collapsed the old acronym soup of repayment plans. For anyone taking a new federal loan on or after July 1, 2026, the only income-driven option is the new Repayment Assistance Plan, RAP, alongside a standard plan. SAVE has been struck down and eliminated. PAYE and ICR are sunsetting by July 1, 2028. One legacy plan survives as a safe haven: Income-Based Repayment, IBR, which remains open to borrowers whose loans predate July 2026.

So Devon faces a forced choice. By 2028, borrowers in the disappearing plans must move to either IBR or RAP. And here is the part that turns a deadline into a trap: if he makes no selection, he is automatically enrolled in RAP.

The detonating number

Here is the piece in one line. RAP charges a percentage of your entire adjusted gross income, with no discretionary-income shield, rising to 10% above $100,000. For Devon, earning $60,000 with no dependents, that is about $250 a month, for up to 30 years, and it is the plan he will be placed in by default if he does nothing.

Why RAP feels different from what you had

The mechanism that makes RAP distinct is what it does not shield. The old income-driven plans protected a slice of income first, often a multiple of the poverty line, and charged a percentage of only what was left. RAP skips that step. It applies a percentage, from 1% at the bottom to 10% above $100,000, to your whole adjusted gross income, then subtracts $50 a month per dependent and floors the payment at $10. Simpler, yes. But for some borrowers, charging a percentage of every dollar rather than only discretionary dollars means a higher payment than the plan they are losing.

RAP is not all downside. It waives unpaid interest so the balance cannot grow if you make your payment, it adds a small principal match, and it forgives the remainder after 30 years. For a lower earner or a parent claiming dependents, RAP can be the cheaper, cleaner choice. The point is not that RAP is bad. The point is that it is a real decision with real dollars on both sides, and the system resolves a missed decision in RAP's favor automatically.

Why the default is the danger

Devon's risk is not RAP itself, it is sleepwalking into it. The surviving alternative, IBR, can produce a lower payment for some borrowers, particularly those who benefit from its payment cap, and it carries a shorter forgiveness timeline than RAP's 30 years for many. Whether IBR or RAP wins depends on Devon's income, his family size, and his balance, and the only way to know is to run both. The one outcome that is clearly a mistake is letting the 2028 deadline pass without choosing, because that hands the decision to a default that was not built around his situation.

How to take back the choice

• Know your plan is changing, because SAVE is gone and PAYE and ICR are sunsetting, so standing pat is no longer an option past 2028.
• Run RAP against IBR with your real numbers, since the winner depends on your income, dependents, and balance, and a roughly $250 RAP payment may beat or lose to IBR for you.
• Decide before the deadline, because failing to choose auto-enrolls you in RAP whether or not it is your cheapest path.
• Recheck after income changes, since RAP tracks your AGI directly, so a raise or a job change moves your payment more immediately than under the old plans.

Devon's comfortable plan to keep doing what he is doing has quietly expired. The new system is simpler, and for some borrowers cheaper, but it resolves indecision by choosing RAP for you. Spending an hour to compare RAP against IBR, before 2028, is how he makes sure the plan he ends up in is the one he picked rather than the one he defaulted into.

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Devon is a composite character used to illustrate typical math. His income and loans are hypothetical; the plan changes, the RAP formula, and the deadlines are real as of June 2026, with implementation guidance still rolling out. The right plan depends on your full situation. This article is educational and is not financial advice.

Related reading: how income-driven repayment compares and the borrowing tools we track.