the SAVE plan is ending — what you actually do in July if you're on it
7.5 million borrowers just got 90 days to pick a new repayment plan. Here's how to think through your actual options without panicking or sleepwalking into whatever the system picks for you.
If you're on SAVE, you got the email. Maybe you read it, maybe you didn't. Either way: the plan is ending July 1, and you have until September 30 to choose what happens next.
I've had three clients forward me that email in the last week asking if they need to do something immediately. The answer is no — but also yes. You're not in crisis mode, but you do need to make a decision, and the decision matters.
Here's what's actually happening and how to think through it.
What's ending and why
The SAVE plan — the income-driven repayment plan that launched in 2023 as the Biden administration's replacement for REPAYE — is being discontinued. The Department of Education cited administrative complexity and ongoing legal challenges. That's the official line. The real reason is messier and involves state lawsuits and political capital, but the outcome is the same: if you're on SAVE, you're getting moved.
The email says you'll be auto-enrolled in the Repayment Assistance Plan (RAP) if you don't choose something else by September 30. That sounds fine until you look at what RAP actually is.
What RAP is — and isn't
RAP is income-driven. Your payment is still based on what you earn, not what you owe. That part stays. But the formula is different, and for most borrowers, the payment goes up.
Under SAVE, your payment was 5% of discretionary income for undergrad loans, 10% for grad loans. Under RAP, it's 10% across the board. If you had $50K in undergrad debt and made $60K, your SAVE payment was probably around $180 a month. Under RAP, it's closer to $360.
RAP also changes the forgiveness timeline. SAVE forgave balances after 20 years for undergrad borrowers, 25 for grad. RAP is 20 years for everyone — but here's the thing nobody mentions in the email: if you've been in repayment for a while, those years don't always transfer cleanly between plans. You'll want to check your actual payment count on studentaid.gov before assuming you're halfway to forgiveness.
The other piece: RAP does not have the same interest subsidy SAVE had. Under SAVE, if your payment didn't cover the monthly interest, the government ate the difference and your balance didn't grow. Under RAP, unpaid interest capitalizes. Your balance can grow.
For some people, RAP is fine. For others, it's a trap.
Your actual options
You have three real paths here. Maybe four, depending on your situation.
Option 1: Stay income-driven, pick a different IDR plan.
If RAP's payment is too high, you can choose PAYE or IBR instead. Both cap payments at 10% of discretionary income (same as RAP), but they calculate discretionary income differently — and depending on your family size and income, one might be cheaper than the other.
PAYE is usually better if you're single or married filing separately. IBR is sometimes better if you're married filing jointly and your spouse has income. The studentaid.gov loan simulator will show you the numbers. It's clunky, but it works. Run the scenarios before you decide.
Option 2: Switch to the Standard Repayment Plan.
This is the 10-year fixed payment plan. Your payment is higher than any IDR plan, but you're done in 10 years and you pay way less interest overall.
If your income has gone up since you started repaying loans, and your SAVE payment was already close to what the Standard plan would be, this might make sense. Especially if you're not counting on forgiveness — either because you're not sure you'll stay in a qualifying job for 20 years, or because you just want the loans gone.
I had a client making $85K with $35K in loans. Her SAVE payment was $320. Standard was $380. She switched. She'll pay the loans off by 2033 instead of 2043, and she'll save about $18K in interest. That math doesn't work for everyone, but it worked for her.
Option 3: Do nothing and let RAP happen.
If the RAP payment is manageable and you're planning to go for forgiveness anyway, letting the auto-enroll happen is not the worst move. You don't have to optimize everything.
The risk is that you don't actually look at the payment, you assume it's fine, and then six months from now you realize it's eating a bigger chunk of your budget than it should and you're annoyed you didn't switch when you had the window.
Option 4: Pay them off.
This only applies if you're close to the end and the balance is small enough that you could just finish it. I'm talking sub-$10K, maybe $15K if your income supports it. If that's you, consider it. The mental space you get back from not having student loans is real.
What I'd actually do
Log into studentaid.gov this week. Look at your current payment, your balance, and your projected payoff date under RAP. Then run the loan simulator for PAYE, IBR, and Standard. Compare the monthly payment and the total cost.
If RAP is within $50 of the best option and you don't want to think about this anymore, let it happen. If there's a plan that saves you $100+ a month or $10K+ over the life of the loan, switch.
The deadline is September 30. You have time. But the time goes faster than you think, and the auto-enroll is designed to be the path of least resistance. That's fine if it's actually the right path. It's not fine if you just didn't look.
Most of the people I work with don't panic about student loans — they just let them run on autopilot and assume the system has their back. Sometimes it does. Sometimes it doesn't. This is one of the times it's worth checking.