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Higher payments expected: First wave of borrowers face deadline to switch out of SAVE plan
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Higher payments expected: First wave of borrowers face deadline to switch out of SAVE plan

Posted: 2026-09-29T22:58:50.000Z

Tuesday marks the first deadline for federal student loan borrowers to switch from the Biden-era SAVE repayment plan.

Servicers started reaching out to borrowers in July to notify them. However, notifications are still going out in waves, so everyone’s deadline is different.

Borrowers should double-check that their contact information is up to date and check their email and loan servicer’s messaging portal for official communication about their specific deadline and next steps.

According to the U.S. Department of Education, borrowers who do not transition plans within the 90 days will be automatically enrolled in either the Standard Repayment Plan or the new Tiered Standard Plan.

The SAVE plan provided more lenient terms than other repayment plans, reducing loan payments to as little as 5% of a borrower's discretionary income and offering forgiveness for borrowers who made payments for at least 10 years and originally borrowed $12,000 or less.

Borrowers can transition before their loan servicer communicates a specific 90-day deadline to enroll in another repayment plan. 

One way to identify what plan could work best for you is to use the loan simulator.

Interest Rate Reduction

The U.S. Department of Education also announced Tuesday that it is extending the enrollment period for a 1% interest rate reduction.

Borrowers can now enroll through the end of the year. The enrollment period was originally set to end on September 30. Doing so locks in the interest rate reduction through June 30, 2028.

“This temporary benefit is designed to support borrowers, including those returning to repayment, while ensuring they can access key benefits under the new Repayment Assistance Plan (RAP) that requires on-time payments,” according to a news release.

Repayment Options

Graduated Repayment:

  • This plan starts with lower payments that increase every two years.
    • Payments are made for up to 10 years (between 10 and 30 years for consolidation loans).
      • Direct Loans disbursed on or after July 1, 2026, aren’t eligible for the Graduated Repayment Plan.
        • Time in this plan will not count towards PSLF or IDR loan cancellation.

          Standard Plan:

          • Payments are a fixed amount that is designed to pay off the loan within a set number of years (10 years for most people, and 10 to 30 years for some Consolidation Loans).
            • Monthly payments can be higher than other plans, but the total interest paid is usually lower, and the repayment period is shorter.
              • Direct Loans disbursed on or after July 1, 2026, aren’t eligible for the Standard Repayment Plan. Borrowers with loans disbursed on or after this date would have access to the Tiered Standard Plan.

                Standard Tiered Plan:

                • Your required monthly payment amount is based on the amount of your principal balance that you owe at the time that you enter the plan, the interest rate on your loans, and the length of the repayment period.
                  • Payments are a fixed amount that is designed to pay off your loan within a set number of years (between 10 and 25 years, depending on your total amount of Direct loans when you enter the plan).  
                    • Payments made while enrolled in the Tiered Standard Plan are not considered qualifying payments for PSLF or Temporary Expanded Public Service Loan Forgiveness (TEPSLF).

                      Repayment Assistance Plan (RAP):

                      • The required monthly payment is based on a percentage of your adjusted gross income (AGI) up to 10%, divided by 12, reduced by $50 for each dependent on your federal tax return.
                        • Total monthly payment may not be less than $10.
                          • Any outstanding balance will be forgiven if you haven’t repaid your loan in full after 30 years of qualifying payments.

                            Pay As You Earn (PAYE):

                            • Your monthly payments will be 10% of discretionary income, but never more than you would have paid under the 10-year Standard Repayment Plan.
                              • You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.
                                • You must have a high debt relative to your income.
                                  • Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 years.
                                    • This plan sunsets in mid-2028.

                                      Income-Contingent Repayment (ICR):

                                      • Your monthly payment will be the lesser of 20 percent of discretionary income, or the amount you would pay on a repayment plan with a fixed payment over 12 years, adjusted according to your income.
                                        • Any outstanding balance will be forgiven if you haven’t repaid your loan in full after 25 years.
                                          • This plan sunsets in mid-2028.

                                            Income-Based Repayment (IBR):

                                            • Your monthly payments will be either 10 or 15 percent of discretionary income (depending on when you received your first loans), but never more than you would have paid under the 10-year Standard Repayment Plan.
                                              • You must have a high debt relative to your income.
                                                • Any outstanding balance on your loan will be forgiven if you haven’t repaid your loan in full after 20 or 25 years, depending on when you received your first loans.