SAVE plan ending
The Biden‑era SAVE income‑driven student loan plan is ending — more than 7 million borrowers will need to choose a new repayment plan by fall 2026. Parent PLUS loan rules also change July 1, so families should review new borrowing limits and prepare for different payment terms. ( )
The U.S. Department of Education began sending guidance this week to 7.5 million borrowers enrolled in the now‑defunct SAVE plan, directing them to exit that program and enroll in a lawful repayment option. (ed.gov) Federal loan servicers will start issuing notices on July 1, 2026, and each borrower will be given at least 90 days from their servicer’s notice to pick a new plan; borrowers who don’t choose a plan will be auto‑enrolled into either the Standard Repayment Plan or a new Tiered Standard Plan. (ed.gov) The Department previewed a new Repayment Assistance Plan (RAP) that launches July 1, 2026, and said eligible borrowers can also enroll in existing IDR plans such as IBR, ICR or PAYE depending on eligibility. (ed.gov) Analysts and reporting note that when interest resumed on paused accounts in 2025 the typical borrower’s monthly bill rose by roughly $300 per month, though the exact change will vary by individual balance and interest rate. (cbsnews.com) Parent PLUS rules change July 1, 2026: new law caps Parent PLUS borrowing at $20,000 per student per year and $65,000 total, allows a limited multi‑year exception for parents of currently‑enrolled students, and requires Parent PLUS loans disbursed on/after July 1 to be repaid under a single 10–25 year tiered standard plan. (nasfaa.org) Months spent in the SAVE administrative forbearance do not count toward Public Service Loan Forgiveness, but the Department and servicers are identifying options such as the PSLF “buyback” for some borrowers to restore qualifying credit. (staging-usds.mohela.studentaid.gov)
