New Federal Student Loan Plans Are Available. What Borrowers Need to Check Before September 30
Federal student loan repayment changes are now in effect, giving borrowers new options but also creating separate deadlines to track. The Repayment Assistance Plan, or RAP, and the Tiered Standard plan became available nationwide on July 1, 2026.
Borrowers who were enrolled in the former SAVE plan face a separate task: watching for an individual notice from their loan servicer and responding within the 90-day window stated in that notice. A second deadline is approaching for auto pay. Eligible borrowers who enroll by September 30, 2026, can receive a temporary interest-rate reduction through June 30, 2028.
What changed on July 1
According to the Department of Education, RAP bases monthly payments on income and dependents. Payments range from 1% to 10% of adjusted gross income, depending on income, and are reduced by $50 for each dependent claimed on a federal tax return. The minimum monthly payment is $10.
RAP has a 30-year repayment period. According to the Department of Education, qualifying borrowers who make on-time monthly payments can have remaining unpaid monthly interest waived. The plan also includes a matching principal payment benefit: if an on-time payment reduces principal by less than $50, the government can contribute up to $50 per month toward the principal balance.
Those features do not guarantee that every borrower will pay less or receive a discharge. The result depends on the borrower’s income, dependents, loan type, balance and repayment history.
The Tiered Standard plan uses fixed payments over 10, 15, 20 or 25 years, with the term based on the amount borrowed. A longer repayment period may reduce the monthly bill, but it can also mean paying more interest over the life of the loan.
Eligibility is not the same for everyone
The plan available to a borrower depends on the type of federal loan and when it was first disbursed. Federal Student Aid says borrowers whose loans were all first disbursed on or after July 1, 2026, generally have RAP as their income-driven option. Parent PLUS loans are not eligible for RAP. That exclusion also applies to certain consolidation loans that repaid Parent PLUS debt.
Borrowers with older loans may have access to more than one plan, including Income-Based Repayment. Borrowers with mixed loan types or disbursement dates may have different options for different loans. The Department’s eligibility information and the Loan Simulator are the safest ways to check a personalized result.
SAVE borrowers have a rolling 90-day deadline
Federal Student Aid says a court order ended the SAVE plan. Borrowers enrolled in SAVE, or with a pending SAVE application, must choose a new repayment plan and should look for an email or other notice from their loan servicer.
There is not one universal deadline for every SAVE borrower. Notices are being sent on a rolling basis, and each notice identifies the borrower’s 90-day response period. Borrowers who do not choose a plan after that window may be placed automatically into a standard repayment option.
Other borrowers in phased-out plans may have until July 1, 2028, to select RAP, Tiered Standard, IBR or another eligible option. That date should not be treated as the deadline for every person leaving SAVE.
Why servicer notices deserve close attention
A Government Accountability Office report said the Education Department relies on formal change requests to instruct servicers when repayment rules, account procedures or borrower communications change. The report examined the agency’s process for providing those instructions and found that major program changes have increased the complexity of servicers’ responsibilities.
The GAO report is implementation context, not evidence that a particular servicer mishandled an individual account. Borrowers should compare their servicer notice with the information shown in their StudentAid.gov dashboard and contact the servicer if the records do not match.
The Associated Press reported that borrower advocates expect some people leaving SAVE to see substantially higher payments. The actual amount will vary by income, family size, loan type and repayment history.
Check auto pay before September 30
Federal Student Aid says eligible borrowers enrolled in auto pay by September 30, 2026, or already enrolled by that date, can receive a 1% interest-rate reduction through June 30, 2028.
Borrowers already receiving the former 0.25% auto-pay discount should not assume they are getting a separate additional one-percentage-point reduction. The Associated Press reported that, for those borrowers, the change may amount to an increase from a 0.25% reduction to a total 1% reduction — a net change of 0.75 percentage points.
Borrowers should verify the rate shown in their servicer account and confirm that the payment account is active. Auto pay does not make an unaffordable payment affordable, and a failed withdrawal can still create payment problems.
A borrower checklist
- Log in to StudentAid.gov and review your current repayment plan, loan type, balance, interest rate, payment amount and next due date.
- Check your servicer account and locate any SAVE transition notice.
- Write down the exact 90-day deadline if you are notified about leaving SAVE.
- Use the Loan Simulator or Repayment Calculator to compare RAP, Tiered Standard, IBR and other eligible options.
- Give consent for IRS income-data access if you want the application to use verified tax information.
- Confirm that your bank account and auto-pay enrollment are active before September 30.
- If the projected payment is unaffordable, contact your servicer before missing a payment and ask about eligible income-based options or short-term relief.
- Do not pay a third party for federal student-loan assistance. Applying for an income-driven plan is free through StudentAid.gov or your official servicer.
Federal Student Aid says a missed payment becomes delinquent the next day. If a loan remains delinquent for 90 days or more, the servicer can report it to the three major credit bureaus. After 270 days, a delinquent federal loan generally enters default, which can lead to loss of federal aid eligibility, credit damage and collection actions such as tax-refund or wage withholding.
Borrowers who may miss a payment should contact the official servicer early rather than wait for the account to fall further behind.
Sources
- Federal Student Aid: Top FAQs About Income-Driven Repayment Plans
- U.S. Department of Education: July 1, 2026 Repayment Fact Sheet
- U.S. Government Accountability Office: Student Loan Servicing Program Changes
- Associated Press: Federal Student Loan Changes Taking Effect July 1
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