When Should Student Loan Borrowers Switch Out of the SAVE Plan?

The SAVE plan is officially coming to an end after two years of legal battles, and millions of student loan borrowers who have been in an involuntary forbearance will soon need to change repayment plans.

“The U.S. Department of Education (the Department) began issuing guidance to all borrowers enrolled in the unlawful ‘Saving on a Valuable Education’ (SAVE) Plan, directing them to exit the plan and enter a legal federal student loan repayment plan,” said the Education Department in an announcement in March 2026. “The guidance will be sent to the 7.5 million borrowers who enrolled in the illegal SAVE Plan based on the false promise of ‘student loan forgiveness’ and artificially low monthly payments.”

Borrowers don’t have to immediately leave the SAVE plan, but they will have to take action within the next few months. Those who don’t take the appropriate steps within the prescribed time window may be forced into a much more expensive repayment plan that doesn’t count toward student loan forgiveness. Here’s what borrowers should know about the SAVE plan transition.

SAVE borrowers will receive 90-day notices starting in July

The Education Department will begin sending official notices to borrowers as soon as July 1, 2026, giving them a 90-day window to apply to select a different repayment plan. This doesn’t mean you’ll have 90 days from today  to switch plans, and it doesn’t mean that you have to switch plans by or before July 1, 2026. It means you will have to switch plans within 90 days of the date your specific notice is issued, and those notices are going to start going out to borrowers on or around July 1, 2026 (but it may not happen for all borrowers simultaneously). Regardless, however, time is running out to remain in SAVE.

“You will not be able to stay in the SAVE plan for long,” warned the National Consumer Law Center (NCLC) in a new blog post. “You will need to enroll in a different repayment plan soon, likely within 90 days of July 1, 2026. The Department has announced that loan servicers will begin sending notices to borrowers enrolled in SAVE on or around July 1, 2026, telling them to enroll in a different repayment plan within 90 days. This means you will probably need to switch plans by the end of September 2026.”

Repayment plan options after leaving SAVE

Currently, borrowers who want to remain in an income-driven repayment (IDR) plan can switch to either Income-Contingent Repayment (ICR), Income-Based Repayment (IBR) or Pay As You Earn (PAYE). However, the eligibility criteria differ from plan to plan, and whether you qualify for a specific IDR option may depend in part on when your federal student loans were originally disbursed. For example, IBR has a newer version of the plan that is much more affordable, but it is only available for borrowers who first took out their federal student loans on or after July 1, 2014.  Furthermore, ICR and PAYE will be phased out by July 1, 2028, leaving IBR as the only current IDR plan that will stick around on a long-term basis.

“Each of these IDR plans have different eligibility criteria, but they all base payments on income and family size and promise cancellation of any remaining debt after 20 to 25 years in repayment,” explains NCLC. “Depending on your income and family size, your payments may be as low as $0 per month in these plans.”

The new Repayment Assistance Plan (RAP)

On or around July 1, the Education Department is expected to launch a new IDR option called the Repayment Assistance Plan (RAP). RAP may be a bit more affordable for certain borrowers compared to the ICR or “old” IBR plans, and it also will provide a generous interest subsidy to prevent student loan balances from ballooning due to interest accrual. But RAP will have a 30-year repayment term before a borrower can get their student loans discharged, far longer than other IDR plans. And payments made under RAP won’t count toward student loan forgiveness under ICR, IBR or PAYE.

“RAP may be a good fit for you if you want to fully pay off your loans and you want to get any interest not covered by your monthly payments cancelled. However, RAP may not be a good option for you if you are low-income, because you may face higher monthly bills and be in repayment for a longer period of time before your loans are cancelled.”

Non-IDR options: Standard, Extended and Graduated

Borrowers can also switch to a non-IDR plan such as the Standard, Extended or Graduated Repayment Plan. But payments may be higher under these plans, and they won’t count toward student loan forgiveness for IDR or for Public Service Loan Forgiveness (PSLF).

What happens to borrowers who don't switch plans?

Borrowers in the SAVE plan must affirmatively apply to switch to a different repayment plan by their 90-day deadline (again, that clock has not started running yet, and won’t start running until at least July 1). Those who don’t switch plans will have the choice made for them: the Education Department will likely force these borrowers into a Standard Repayment Plan.

“If you do not enroll in a different repayment plan by the end of your 90-day period, the Department has said you will be automatically reassigned to another plan, likely the Standard Repayment Plan,” says NCLC. “Payments in the Standard plan are based on the borrower’s loan balance, not their income, and are often much higher than payments in SAVE or other income-driven repayment plans.”

In addition, as noted above, payments made under a Standard Repayment Plan typically won’t count toward student loan forgiveness. The exception is the 10-year Standard plan, which can count toward PSLF (but pays off the underlying student loans within 10 years, potentially defeating the purpose of PSLF).

When borrowers should switch plans

Borrowers in SAVE don’t have to wait until they receive their 90-day notice on or after July 1 to switch to a different repayment plan. In fact, there may be good reasons to change plans sooner rather than later. The SAVE plan forbearance continues to not count toward student loan forgiveness, and interest has been accruing since August 2025, so borrowers who want to get back on track for student loan forgiveness under IDR or PSLF may want to consider applying now for a different IDR plan. In short, the time spent in forbearance is counting toward nothing, while your student loan balance continues to grow.

Furthermore, some advocacy groups are concerned that there will be a massive surge in new IDR applications later in summer 2026 as millions of SAVE plan borrowers rush to apply by their 90-day deadlines. The Education Department has projected confidence that the government and its contracted student loan servicers will be able to handle a high volume of application processing. But the department has continued to struggle with application backlogs across a number of different student loan relief programs including PSLF Buyback, Borrower Defense to Repayment and the Total and Permanent Disability discharge program. More than 500,000 IDR applications remain backlogged, as well. Applying to switch to an IDR plan sooner rather than later may be prudent for borrowers who want to avoid potential processing delays and associated problems.

Other student loan borrowers may want to wait a bit longer, however, before changing plans. Payments under all other IDR plans are likely going to be higher than they were under SAVE, particularly for borrowers whose income is the same or higher than it was a few years ago. Having an extra few months to prepare for the higher payments can help avoid budget shock. And borrowers who want to enroll in RAP will have to wait until at least July 1, the target date when RAP is expected to launch. Otherwise, borrowers would have to first switch to either ICR, IBR or PAYE, and then apply again to switch from one of those repayment plans to RAP once the new plan goes live.

“Waiting until July 1 will give you more time before you need to make payments, but be aware that interest will continue to be charged while you wait,” said NCLC in the new blog post.

Borrowers who find that they cannot afford their student loan payments in their new repayment plan can explore temporary deferment or forbearance options to postpone their payments, giving them time to explore alternative repayment options. But be aware that interest will continue to accrue.

If you're not sure which repayment plan makes sense after SAVE, get a custom plan and we'll map out your best move based on your loans, income and forgiveness goals.