What Student Loan Borrowers in the SAVE Plan Should Know for 2026

More than seven million federal student loan borrowers remain in the SAVE plan forbearance, with no payments currently due. But that may change very soon.

The Saving on a Valuable Education (SAVE) plan, first launched by the Biden-Harris administration in 2023 to provide for lower monthly payments and faster student loan forgiveness in certain cases than most other income-driven repayment (IDR) plans, is coming to an end. In December, the Trump administration entered into a formal settlement agreement with a group of states led by Missouri that had challenged the program. Under the terms of that settlement agreement, which is still pending court approval, the SAVE plan will be eliminated. The only question is when.

“On Dec. 9, 2025, the U.S. Department of Education (ED) announced a proposed settlement agreement with the state of Missouri that would end the Saving on a Valuable Education (SAVE) Plan,” says Education Department guidance updated in December. “As part of the proposed settlement agreement, which is pending court approval, ED would not enroll any new borrowers in the SAVE Plan, deny any pending SAVE applications, and move all SAVE borrowers into available repayment plans… The settlement must be approved by the court before it can be implemented.”

While the timing is unclear and dependent in part on when the court overseeing the legal challenge approves the settlement agreement, borrowers with student loans in the SAVE plan forbearance will likely be required to switch to a different repayment plan sometime during 2026, and possibly quite soon. Here’s what SAVE plan student loan borrowers should know. 

Student loan borrowers can switch to IBR, ICR or PAYE

Borrowers with federal student loans in the SAVE plan can switch to a different IDR plan, depending on their eligibility. 

“Eligible borrowers can apply for or recertify under the Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and Pay As You Earn (PAYE) Repayment Plans,” explains the Education Department. But all three plans will almost always result in higher payments than what borrowers had been paying under SAVE. That’s because SAVE was specifically designed to be more affordable than the other IDR options. In addition, many borrowers now have higher incomes than they did when they first enrolled in SAVE.

However, under the One Big, Beautiful Bill Act (OBBBA), the Education Department will sunset the ICR and PAYE plans by July 1, 2028. Eligible borrowers with student loans in the SAVE plan can select ICR or PAYE for now (if eligible), but their time in those repayment plans will be limited, and they will need to switch plans yet again within the next couple of years once ICR and PAYE are phased out.

IBR, however, is preserved under OBBBA. And last month, the Education Department finally completed system updates required under the OBBBA that eliminate the “partial financial hardship” requirement for IBR. This will allow borrowers with higher incomes relative to their federal student loan balances to enroll in IBR so that they can continue pursuing IDR student loan forgiveness and Public Service Loan Forgiveness (PSLF).

“The One Big Beautiful Bill Act (OBBBA) allows borrowers who don’t have partial financial hardship to enroll in the Income-Based Repayment (IBR) Plan,” says Education Department guidance. “On Dec. 22, 2025, we updated our systems, including Loan Simulator, to implement this change. Borrowers who previously could not enroll in the IBR Plan because they lacked partial financial hardship will now see IBR as an option when using Loan Simulator, and they can enroll in the IBR Plan using the online income-driven repayment (IDR) plan application.”

Parent PLUS borrowers will need to enroll in ICR first

Parent PLUS borrowers who were able to enroll in the SAVE plan through the so-called “double-consolidation” loophole will need to select a different IDR plan, too, but their options will be more limited. Under normal federal rules for IDR plans, the only way for Parent PLUS borrowers to access IDR is to consolidate their loans via the federal Direct consolidation program and enroll in ICR. But ICR is being eliminated under the OBBBA in 2028. Consolidated Parent PLUS borrowers will eventually be able to switch to the IBR plan once ICR is phased out, but they must first enroll in ICR and make at least one payment under ICR before they will be permitted to switch to IBR.

“Previously, borrowers were required to have partial financial hardship and to not have certain types of ineligible loans in order to enter an IBR Plan,” explains the Education Department in its online OBBBA guidance. “With the passage of OBBBA, the IBR Plan now has updated eligibility criteria that allow… Parent PLUS borrowers who have consolidated their parent PLUS loans into Direct Consolidation Loans and who have enrolled in the Income-Contingent Repayment (ICR) Plan immediately before enrolling in the IBR Plan.”

That means that “double-consolidated” Parent PLUS borrowers who are currently in the SAVE plan forbearance will need to first apply to switch to the ICR plan and make at least one monthly payment under ICR before they can switch into IBR and be grandfathered into that plan. In addition, Parent PLUS borrowers who have not consolidated their loans would need to do so before July 1, 2026, under the OBBBA. Otherwise, they will effectively be cut off from all IDR plans, including IBR and ICR.

Student loan borrowers can enroll in RAP later this year, but timing is unclear

Later in 2026, the Education Department will launch a new plan mandated under the OBBBA called the Repayment Assistance Plan, or RAP. RAP will have a number of benefits, including potentially lower payments than IBR and ICR in certain cases, and an interest subsidy that will prevent runaway balance growth during periods of negative amortization (similar to what the SAVE plan had offered). 

But RAP will also have a 30-year repayment term before a borrower can qualify for student loan forgiveness (much longer than the 20- and 25-year terms available for current IDR plans), and will likely result in higher monthly payments for lower-income borrowers and those who have nontraditional families (due to RAP’s narrower definition of family size). Importantly, only student loan borrowers will be eligible for RAP; Parent PLUS borrowers will not be eligible, even if they have consolidated their loans.

But the timing of the launch of RAP is unclear. The Education Department is still finalizing the governing regulations for RAP. The program could go live this summer, but it is unclear if student loan borrowers in the SAVE plan will be able to directly transition from SAVE to RAP. 

If the department winds up kicking borrowers out of the SAVE plan before RAP’s launch later this year, borrowers may have to switch plans multiple times during 2026 — first from SAVE to either IBR, ICR or PAYE, and then again to either IBR or RAP, the only two IDR options that will remain for student loan borrowers once the dust settles.