RAP set for July 2026 as Student Loan SAVE ends
Federal student loan borrowers in SAVE will be pushed into a new repayment system on July 1, 2026, as the Saving On A Valuable Education program comes to a close after a two-year legal battle. The Repayment Assistance Plan is expected to be available in July 2026, and borrowers will have 90 days to pick a new plan.
Those who do nothing will not stay in SAVE. They will be moved automatically into standard repayment or the newly created tiered standard repayment plan, depending on their borrowing status.
SAVE closes on July 1
SAVE launched in late 2023 and gave borrowers an interest subsidy and a payment pause from the summer of 2024 to the summer of 2025. Interest resumed in August 2025, ending the temporary relief that had helped many borrowers keep balances from growing during that period.
The pause period now carries another consequence. The forbearance time in SAVE is not initially considered eligible credit for any federal forgiveness program, and borrowers pursuing Public Service Loan Forgiveness or IDR forgiveness may find that about two years do not count toward their totals.
RAP and tiered standard repayment
The new Repayment Assistance Plan is the newest income-driven repayment option and is expected to arrive in July 2026. It has features from SAVE and REPAYE, including a subsidy for all unpaid interest, and if a borrower makes the required payment under RAP, the loan balance will never go higher.
Income-driven repayment rules are also changing because of the OBBBA bill passed in 2025. Under the new structure, ICR and PAYE will sunset by July 2028, narrowing the set of repayment plans available to borrowers over time.
Tiered standard repayment will be the new default for federal loan borrowers who take loans later than June 30, 2026. Payment terms will be based on how much a borrower owes, and for most white coat investors, the repayment term would be over 25 years.
PSLF buyback delays
Borrowers trying to recover missed time through the PSLF buyback program face another obstacle. The program has been largely stalled by the Department of Education, and processing times are currently exceeding three years.
That leaves borrowers with a short window before the July 1 switch to review their plan, since automatic placement into standard repayment or tiered standard repayment can happen if they do not choose. The immediate task is to match the new plan to their forgiveness path before the old SAVE structure ends.
