Major federal student loan changes take effect on July 1, and most borrowers currently in repayment will be affected in some way.
Whether you’re in SAVE, another income-driven plan, Standard, Graduated, or pursuing Public Service Loan Forgiveness (PSLF), the next few months will bring new rules, new repayment options, and important deadlines.
Here’s what to know—and what to do next.
1. The SAVE Plan Is Ending
The most significant change is the end of the SAVE repayment plan.
If you’re currently enrolled in SAVE:
- You will receive a 90-day transition notice from your loan servicer starting July 1
- You must select a new repayment plan within 90 days of receiving that notice
- If no action is taken, you will likely be automatically moved to the Standard plan, which may result in higher monthly payments
Bottom line: If you’re in SAVE, you’ll need to actively choose your next repayment plan.
2. Watch for Important Notices From Your Servicer
Between July and September, loan servicers will send updated communications to impacted borrowers.
These notices may include:
- Your new monthly payment amount
- Whether your current plan is changing
- If and when you need to recertify your income
- Your deadline to take action (especially for SAVE borrowers)
- Any updates to interest benefits or eligibility rules
Action step: Open and review every communication from your servicer—these notices will directly outline what’s changing for you.
3. Income-Driven Repayment (IDR) Plans Are Changing
If you’re in an income-driven plan (SAVE, REPAYE, PAYE, IBR, or ICR), expect updates.
Key changes may include:
- Adjustments to payment calculations
- Changes to interest subsidies
- Phase-outs of existing plans
- Potential need to recertify income earlier than expected
Even if you stay in your current plan, your monthly payment could change.
WHAT'S STAYING VS. PHASING OUT
- IBR (Income-Based Repayment): Remains available for eligible borrowers
- PAYE & ICR: Temporarily available but expected to phase out by July 2028
4. A New Option: Repayment Assistance Plan (RAP)
Starting July 1, borrowers will have access to a new plan: the Repayment Assistance Plan (RAP).
RAP is designed for borrowers with lower or variable incomes and offers:
- Lower starting monthly payments
- A simplified payment formula
- Payments that gradually increase as income rises
For borrowers who relied on SAVE for affordability, RAP may be a comparable option worth exploring.
5. PSLF Borrowers: Double-Check Your Plan
If you’re pursuing Public Service Loan Forgiveness (PSLF), it’s important to ensure your repayment plan still qualifies.
Make sure:
- You are enrolled in a PSLF-eligible repayment plan
- Your employment certification is up to date
- Check PSLF status and submit certification
If you were in SAVE, you will need to transition to a new qualifying IDR plan to continue earning credit toward PSLF.
6. What Borrowers Should Do
IF YOU'RE IN SAVE
- Watch for your 90-day transition notice
- Choose a new repayment plan before your deadline
- Recertify your income at: Apply or recertify IDR
- Review your PSLF eligibility, if applicable
IF YOU'RE MOVING TO ANOTHER IDR PLAN
- Expect your payment to be recalculated
- Recertify your income
- Compare your options, including RAP and other IDR plans
- Consider your long-term goal (e.g., forgiveness after 20–30 years)
IF YOU'RE IN STANDARD, GRADUATED, OR EXTENDED REPAYMENT
- Your plan will generally remain available
- Your payment could still change if recalculated
- It may be worth comparing your plan to RAP or IDR options for potential savings
7. What to Do Now vs. After July 1
BEFORE JULY 1
- Log in to your loan servicer account
- Confirm your contact information is up to date
- Review your current repayment plan
AFTER JULY 1
- Open and review your servicer notice immediately
- Mark your personal deadline
- Compare repayment options and select a new plan if needed
- Recertify income early to avoid delays
- Contact your servicer if anything is unclear
Bottom Line
The July 1 changes will impact most borrowers—but the impact is greatest for those in the SAVE plan, who must transition within a defined timeframe.
Taking early action—reviewing your plan, watching for notices, and choosing the right repayment option—can help you:
- Avoid unexpected payment increases
- Stay on track toward forgiveness (if applicable)
- Select a plan that fits your financial goals
Need Help Navigating the Changes?
There have been significant updates to federal student loan programs over the past several years, and it can be difficult to keep up. Check to see if your employer provides EdAssist student loan coaching as a benefit.
