What Happens to IBR and SAVE Borrowers When RAP Starts

IBR Borrowers & RAPSAVE, PAYEPay As You Earn (PAYE)A federal income-driven repayment plan that caps monthly payments at 10% of discretionary income and forgives remaining debt after 20 years. It is only available to borrowers who took out their first federal loans on or after October 1, 2007. & ICRIncome-Contingent Repayment (ICR)The oldest federal income-driven repayment plan, with payments generally set at 20% of discretionary income or a fixed 12-year amount, whichever is lower. It is the only IDR plan available to Parent PLUS borrowers after consolidation. BorrowersRAP BenefitsFAQs

Nothing dramatic happens when the new Repayment Assistance Plan (RAP) launches on July 1, 2026. If you’re already in Income-Based RepaymentIncome-Based Repayment (IBR)A federal income-driven repayment plan that caps monthly payments at 10% or 15% of discretionary income, depending on when the loans were taken out. Remaining debt is forgiven after 20 or 25 years of qualifying payments. (IBR), you can stay there as long as you want. You’ll also have the option to move into RAP once it’s available.

For SAVE borrowers, the picture has changed: the SAVE Final Rule was vacated on March 10, 2026, and borrowers in administrative forbearance will need to transition to IBR or RAP. Your qualifying paymentQualifying PaymentA monthly loan payment that counts toward federal forgiveness programs like PSLF or IDR forgiveness. Whether a payment qualifies depends on the loan type, the repayment plan, and the borrower's employment at the time of payment. history carries over regardless of which plan you move to — you won’t lose credit or start over.

What Happens to IBR Borrowers When RAP Launches

RAP doesn’t replace or erase IBR. It simply becomes the defaultDefaultThe status of a federal student loan after the borrower has failed to make required payments for 270 days. Default can trigger collection actions such as wage garnishment, tax refund offset, and damage to credit reports. plan for new borrowers taking out federal loans after July 1, 2026. If you’re already in IBR, you can keep your plan indefinitely — no forced migration and no lost progress.

When RAP arrives, you’ll be allowed — but not required — to switch. Your existing IBR payment history from the one-time account adjustment automatically carries over. If you’ve made 240 or 300 qualifying payments, those months still count toward forgiveness. The only change is that RAP extends the finish line by five years: 25 years becomes 30, and 20 becomes 25.

That’s why the switch will make sense to some people but not to others.

• If you’re close to forgiveness — say, within a few years — staying in IBR almost always wins. The extra five years under RAP would cost you more time than the interest savings are worth.
• If you’re many years away from forgiveness and your balance is growing fast because of interest, RAP’s built-in interest waiver and monthly principal credit could reduce the long-term damage, even with the longer timeline.

Related: IBR vs RAP: Which Student Loan Repayment Plan Is Better for You?

What Happens to SAVESAVE Plan (SAVE)The Saving on a Valuable Education Plan, a federal income-driven repayment plan introduced in 2023 to replace REPAYE. Its implementation has been subject to ongoing litigation, and enrolled borrowers have faced court-ordered forbearance periods., PAYE, and ICR Borrowers

SAVE, PAYE, and ICR are all being phased out — but on different timelines and for different reasons.

SAVE no longer exists. On March 10, 2026, a federal court vacated the SAVE Final Rule after the Eighth Circuit reversed an earlier dismissal and directed entry of final judgment. The SAVE plan, as established by the 2023 regulation, is gone. Approximately 7.4 million borrowers who were in SAVE administrative forbearance will need to move to a different repayment plan. The One Big Beautiful Bill Act (OBBBA) also eliminates SAVE by statute, effective July 1, 2028 — but the court’s vacatur ended it ahead of that deadline.

PAYE and ICR stay open until July 1, 2028. New PAYE enrollments are scheduled to end on July 1, 2027. After July 1, 2028, both plans sunset permanently. Borrowers in PAYE or ICR at that point will be transitioned to IBR or RAP.

Your forgiveness credit carries over. Every qualifying payment you’ve made under SAVE, PAYE, or ICR counts toward forgiveness in whatever plan you move to — IBR or RAP. You do not lose credit or start over. If you made 150 payments under PAYE and switch to IBR, you have 150 payments toward IBR’s 240- or 300-payment forgiveness threshold. The same applies if you switch to RAP, though RAP’s threshold is 300 or 360 payments.

The Department of Education is expected to provide transition guidance as the July 2026 RAP launch approaches. Borrowers in SAVE forbearance who want to enter repayment now can switch to IBR without waiting for RAP.

Related: Should You Switch IDR Plans in 2026? What to Know About SAVE, PAYE, IBR, and ICR

What Are the Benefits of RAP

From a benefit standpoint, RAP is designed to give borrowers a relatively soft landing as older plans phase out. It keeps two key features that SAVE introduced:

• An interest waiver — unpaid interest won’t pile up if you make your required payment.
• A principal contribution — each payment chips away at your balance even when your income-based amount is small.

These two benefits could lower a future tax bill.

Related: Will I Owe Taxes on IBR Forgiveness After 2025?

The trade-off is that RAP’s payments will likely be higher than SAVE’s 5% formula, and its forgiveness timeline stretches an extra five years. So while RAP isn’t as generous as SAVE was, it’s still a step up from the older PAYE and ICR plans for borrowers who need interest relief.

If you’re in PAYE or ICR and are close to forgiveness, it’s fine to stay put until you’re done. But if you’re years away — or your balance is still climbing — it’s worth comparing your options once RAP becomes available and the calculators are live.

Deadlines That Matter Between Now and 2028

Several deadlines affect which plans are available and when borrowers need to act. Parent PLUS changes are part of a broader set of federal student loan changes taking effect in mid-2026 — the full timeline covers deadlines across IDR, PSLFPublic Service Loan Forgiveness (PSLF)A federal program that forgives the remaining balance on Direct Loans after 120 qualifying monthly payments made while working full-time for a government or qualifying nonprofit employer., Grad PLUS, and more.

Now through June 30, 2026: Parent PLUS borrowers who want access to income-driven repaymentIncome-Driven Repayment (IDR)A category of federal student loan repayment plans that calculate monthly payments based on income and family size rather than loan balance. Any remaining balance can be forgiven after 20–25 years of qualifying payments. must consolidate into a Direct Consolidation Loan before this date. The Department of Education recommends submitting consolidation applications by April 1, 2026, to allow processing time.

• July 1, 2026: RAP becomes available. New borrowers taking out loans after this date will have RAP as their only income-driven option. Existing borrowers can switch to RAP or stay in IBR.
• July 1, 2027: New PAYE enrollments close.
• July 1, 2028: PAYE and ICR sunset permanently. Borrowers still in those plans will be transitioned to IBR or RAP.

Aside from the Parent PLUS consolidation deadline, none of these dates requires immediate action from borrowers already in IBR. The Department of Education will send notices when transitions begin.