US federal student loan repayment restructuring

Federal student loan repayment structures in the United States are undergoing a significant transition. Following a federal court order that ended the SAVE repayment plan, the U.S. Department of Education has begun notifying millions of affected borrowers that they must select a new repayment option within a 90-day window.

Failure to act within this period may result in automatic enrollment in default options, such as the Standard Repayment Plan or the Tiered Standard Plan. These default options typically involve fixed payments based on total loan balances, which may increase monthly costs compared to the previous income-tied SAVE plan.

As of July 1, 2026, existing plans including PAYE, SAVE, and ICR are being replaced by two primary options: the Repayment Assistance Plan (RAP), which calculates payments based on income, and the Tiered Standard Plan, which offers fixed payments. While existing borrowers on PAYE or ICR have until July 1, 2028, to choose a plan, any individual taking out new federal loans on or after July 1, 2026, will find RAP to be the only available income-driven option.