SAVE Plan Is Ending: RAP vs IBR vs Standard, Payments Compared

About 7 million federal student-loan borrowers are being moved off the SAVE plan, and the first of them had until September 29, 2026 to choose a replacement. The rest receive the same 90-day notice in waves through March 2027. Borrowers who do not choose are expected to be placed on a Standard plan — a payment based only on the balance, not on income.

For a single borrower earning $40,000 with $30,000 of undergraduate loans, that is the difference between roughly $17 a month under SAVE and $333 on the 10-year Standard plan. The two income-driven plans still open to SAVE borrowers — the new Repayment Assistance Plan (RAP) and Income-Based Repayment (IBR) — would charge $100 and $134.

This guide prices all three plans for five typical borrowers, monthly and over the life of the loan, so you can see which choice fits your income, family and balance before your deadline.

What changedWhy SAVE is ending

SAVE was the Biden-era income-driven plan that set payments at 5% to 10% of income above 225% of the poverty line. A federal court vacated most of its rules on March 10, 2026, after a lawsuit by Missouri and other states, and the Education Department agreed to wind the plan down. SAVE borrowers had been in forbearance while the case ran.

At the same time, the tax and spending law signed in July 2025 rebuilt federal repayment:

• RAP opened on July 1, 2026 for Direct Loan borrowers.
• IBR lost its old "partial financial hardship" entry test, so borrowers whose income was once "too high" can now enroll.
• PAYE and ICR close no later than July 1, 2028; after that, IBR and RAP are the only income-driven plans.
• Forgiven balances are taxable again from January 1, 2026, when the temporary federal exclusion expired.

The three formulasHow each plan sets your payment

RAP's percentage rises one point for every $10,000 of adjusted gross income: 1% between $10,000 and $20,000, 2% up to $30,000, and so on to 10% above $100,000. Unlike IBR, it applies to all of your income, with no poverty-line deduction. It softens that with two features IBR lacks: any interest your payment does not cover is waived every month, and if your payment would shrink the principal by less than $50, the government adds the difference (up to the size of your payment). Whatever remains after 360 payments — 30 years — is forgiven.

IBR subtracts 150% of the poverty guideline first: $23,940 for a single person and $49,500 for a family of four under the 2026 guidelines. Borrowers whose loans predate July 1, 2014 use the original IBR — 15% of discretionary income, forgiveness after 25 years instead of 20.

Monthly paymentsFive borrowers, three plans

Three patterns show up:

1. 01Doing nothing is the most expensive monthly choice for everyone. Standard is roughly two to eight times the lowest income-driven payment in every example.
2. 02RAP wins for single borrowers in the middle. At $40,000 and $60,000 of income it is the lowest payment of the three, because IBR's poverty-line deduction matters less than RAP's lower percentage.
3. 03IBR wins for families, the lowest incomes and high earners. A family of four deducts $49,500 before IBR's 10% applies, while RAP subtracts only $100 for two children — so IBR is $171 a month cheaper. At $110,000, RAP's 10% of all income costs $200 more than IBR's 10% of the income above the poverty line.

Over the whole loanMonthly payment is not total cost

A lower payment can mean paying for longer. We projected each borrower forward with income rising 3% a year and family size unchanged:

The Standard plan is the cheapest in total for four of the five — it is also the one that may not fit the budget. Between the two income-driven plans, RAP usually costs less over the life of the loan because unpaid interest is waived rather than added to the balance, and the principal match keeps the balance falling. The family example is the starkest: IBR's lower payment lets interest run for nearly 19 years and costs $26,577 more than RAP, which pays the loan off in under 11.

The lowest-income borrower is the exception. On IBR she pays $27,357 and has $32,363 forgiven after 20 years; on RAP her rising payments clear the whole balance in 24 years. But forgiveness is now taxable: at a 22% bracket, that $32,363 would add roughly $7,100 to her federal tax bill in the year it is forgiven.

Special casesPSLF, Parent PLUS and consolidation

• Public Service Loan Forgiveness. Payments under RAP, IBR and the 10-year Standard plan all count toward the 120 qualifying payments. If you expect PSLF, the lowest monthly payment is usually the right choice, because the rest is forgiven tax-free under PSLF after 10 years.
• Parent PLUS loans cannot use RAP. They reach IBR only if they were consolidated before July 1, 2026.
• Older FFEL loans need consolidation into a Direct Loan to use RAP; check the effect on any progress toward forgiveness before consolidating.
• Refinancing into a private loan ends access to every federal plan, forbearance and PSLF. It can make sense for high earners with stable jobs and a rate well below their federal rate; the Student Loan Refinance Calculator shows the monthly and lifetime difference before you give those protections up.

Before your deadlineA five-step checklist

Once the new payment is set, put the loan in the Debt Payoff Tracker next to your other debts. It shows the payoff date and total interest, and lets you see what an extra $50 a month does. If you also carry credit-card balances, our debt snowball vs avalanche guide explains why low-rate federal loans usually stay out of the payoff race, and pay off debt or invest covers where spare cash goes first.

Frequently asked questions

What happens if I don't choose a new plan after SAVE ends?

If you do not pick a plan within 90 days of your servicer's notice, you are expected to be placed on a Standard or Tiered Standard plan, where the payment is based on your balance, not your income. You can still apply for an income-driven plan later.

Is RAP better than IBR?

It depends on income and family size. In our examples RAP had the lowest payment for single borrowers earning $40,000–$60,000 and usually cost less over the life of the loan. IBR had lower payments for a family of four, for a borrower earning $28,000 and for one earning $110,000.

How is the RAP payment calculated?

Take your adjusted gross income, find its percentage band (1% for $10,000–$20,000 rising one point per $10,000 to 10% above $100,000), multiply, divide by 12, and subtract $50 for each dependent. The minimum is $10 a month.

Does student loan forgiveness count as taxable income in 2026?

Yes for IBR and RAP forgiveness: the temporary federal exclusion ended on December 31, 2025. Public Service Loan Forgiveness remains tax-free.

Do months on SAVE count toward forgiveness?

Months spent in the SAVE litigation forbearance generally do not count toward income-driven forgiveness; PSLF borrowers may be able to buy them back. Check your payment count on StudentAid.gov before choosing a plan.

Sources and methodology

Plan rules were checked on September 28, 2026 against published summaries from the Education Department's announcements, The Institute for College Access & Success (TICAS), the Student Loan Borrower Assistance project of the National Consumer Law Center, and Saving for College; deadlines and the 7-million figure from the Department's July 2026 notices as reported by Forbes and CNBC; 2026 poverty guidelines from HHS. Payments for five illustrative borrowers, SAVE comparisons (5% of income above 225% of poverty for undergraduate loans, 10% for graduate) and lifetime projections are reproduced in drafts/save-plan-ending-numbers.mjs.

The projections assume income rises 3% a year, family size and filing status stay the same, rates are fixed, and every payment is made on time. They ignore IBR's temporary interest benefit on subsidized loans (which lowers IBR's cost slightly) and any months already credited toward forgiveness. They are illustrations, not a quote from your servicer; confirm your payment in the StudentAid.gov Loan Simulator. Educational information only, not legal or tax advice.