New federal student-loan repayment plans take effect as borrowers leave SAVE

New federal student-loan repayment options took effect July 1, 2026, changing the choices available to borrowers entering repayment and to people taking out or consolidating Direct Loans.

The Education Department made the Repayment Assistance Plan, known as RAP, and the Tiered Standard Plan available after a March 10, 2026, court order ended the SAVE plan. More than 7.5 million borrowers were enrolled in SAVE, according to the department, and must transition to another legal repayment plan.

The change applies nationwide. Federal Student Aid and the Education Department are directing borrowers to review their options and take the steps needed to move out of SAVE.

What changed on July 1

Borrowers who take out or consolidate Direct Loans on or after July 1, 2026, must repay those loans under RAP or the Tiered Standard Plan. The two plans are the new repayment choices identified in federal student-loan servicing information.

The new plans are not described in the approved federal materials as broad loan forgiveness. The amount an individual borrower will pay each month is also not the same for everyone. It depends on factors including income, dependents, loan balance and loan type.

For former SAVE borrowers, the practical issue is transition. The Education Department said those borrowers must select another legal plan, but the approved sources do not establish how many had completed that transition by Aug. 6, 2026.

Autopay reduction has a deadline

Borrowers enrolled in autopay can receive a temporary interest-rate reduction of 1 percentage point beginning July 1, 2026. To receive the reduction through June 30, 2028, borrowers must enroll in autopay by Sept. 30, 2026.

The materials do not say that the reduction applies to every federal loan or every borrower. Its availability is tied to the applicable federal repayment and servicing rules, so borrowers should check their account and loan type before assuming the reduction will apply.

The deadline is the next clearly identified date for borrowers seeking the temporary benefit. The Federal Student Aid guidance also addresses repayment, delinquency and default, making account review and timely action important for people whose plans are changing.

What borrowers should do next

Former SAVE borrowers need to identify a legal repayment plan and follow instructions from Federal Student Aid or their loan servicer. Borrowers taking out or consolidating Direct Loans on or after July 1 must choose between RAP and the Tiered Standard Plan under the new rules.

Borrowers considering autopay should confirm whether they qualify and complete enrollment by Sept. 30 if they want to seek the temporary 1-percentage-point reduction. The benefit is scheduled to last through June 30, 2028.

Because payment amounts vary by a borrower’s income, dependents, balance and loan type, the launch of the new plans does not establish one payment amount for all former SAVE borrowers. The approved sources likewise do not provide a single transition date or a completed-transition total for the more than 7.5 million people affected.

The Education Department’s March announcement scheduled RAP and the Tiered Standard Plan to become available July 1. With that date now reached, the central task for borrowers is determining which legal option applies to their loans and meeting any relevant servicing or autopay deadline.