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SAVE Ends July 1; Borrowers Must Choose Repayment Plan

6/11/2026

25 5 Full Breakdown

Summary

Education Dept Ends

The Education Dept. will notify borrowers on July 1 that SAVE ends, giving them 90 days to choose Standard Repayment Plan or RAP, the only options for new borrowers thereafter.
If borrowers do not choose, they are auto-placed into the standard plan, raising payments.
The RAP bases payments on adjusted gross income and costs more than current income-driven plans.

Summary

McMahon Warns Consolidation

Education Secretary Linda McMahon warned Parent PLUS loans must be consolidated by June 30, 2026 or borrowers become “new borrowers” and lose income-driven repayment.
The National Consumer Law Center said consolidations after July 1, 2026 could erase forgiveness credit already earned.
Amanda Burton, financial-aid director at Utah Valley University, said ending Graduate PLUS loans and lowering caps could push graduates to private loans or dropout.

History

Historical Context

After the U.S. Department of Education introduced Income-Based Repayment in 2005, Federal Student Aid reported over 2.5 million borrowers by 2010, cutting monthly payments by $1.2 billion. The program built on earlier income-contingent repayment concepts and followed the 2007 Higher Education Opportunity Act, while the 2017 termination of the Perkins Loan signaled a shift toward broader income-driven repayment options.

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Education Dept Ends

The Education Dept. will notify borrowers on July 1 that SAVE ends, giving them 90 days to choose Standard Repayment Plan or RAP, the only options for new borrowers thereafter.
If borrowers do not choose, they are auto-placed into the standard plan, raising payments.
The RAP bases payments on adjusted gross income and costs more than current income-driven plans.

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