Millions must pick new loan plans

What's happened

The SAVE repayment plan has ended and servicers have begun notifying about 7–7.5 million borrowers that they have 90 days from their notice to enroll in a different plan. New Department of Education rules that took effect July 1 have created two replacement options — the Repayment Assistance Plan (RAP) and a Tiered Standard plan — and added new borrowing caps for graduate and Parent PLUS loans.

What's behind the headline?

What is changing now

• The SAVE repayment plan has ended; servicers are sending rolling notices that give each affected borrower 90 days from that notice to choose a replacement plan. If borrowers do not act, the department will place them on a Standard or Tiered Standard plan.

How the new plans work

• Repayment Assistance Plan (RAP): monthly payments are calculated from a borrower’s adjusted gross income (AGI) and the number of dependents; payments typically range from 1% to 10% of AGI for those above $10,000, with a $10 minimum for lower incomes. RAP includes an interest waiver and up-to-$50 principal match for on-time payments, but those benefits are lost for late payments.
• Tiered Standard plan: fixed monthly payments with repayment terms of 10–25 years depending on balance; it functions as a stretched standard plan and will be one of only two plans available to new borrowers after July 1.

Immediate consequences for borrowers

• Millions will see higher monthly bills this summer and autumn as they are moved out of SAVE or choose alternatives. Some borrowers already report projected payments jumping by hundreds of dollars.
• Missing a switch deadline will often leave borrowers on more expensive standard terms; prolonged nonpayment risks delinquency and default.
• RAP incentivises autopay with a temporary 1 percentage-point interest-rate reduction through June 30, 2028, but autopay can mischarge incorrect amounts for some borrowers.

Who benefits and who loses

• New borrowers will have only RAP or the Tiered Standard plan as long-term options, narrowing choice and removing some more generous income-driven terms in the future.
• Parent PLUS and many graduate borrowers face tightened caps: new annual and lifetime limits will reduce available borrowing for parents and cap graduate loans (subject to ongoing litigation and narrow exceptions for some professional programs).

What will happen next

• Servicers are rolling notices through March 2027; many borrowers will get extended windows but processing delays are likely. Legal challenges are active and could alter implementation. Expect higher delinquencies and increased pressure on servicers and the Education Department as transfers accelerate.

How we got here

A federal appeals court struck down the Biden-era SAVE plan earlier this year. Congress enacted the One Big Beautiful Bill Act, which the Education Department has used to roll out new repayment rules and borrowing limits that took effect on July 1, 2026.

Our analysis

The coverage converges on three clear facts: SAVE has ended, servicers are issuing 90-day notices, and two new plans launched on July 1. Business Insider (Ayelet Sheffey) flagged the first batch of notices on July 1 and quoted servicer emails saying: "You have 90 days to select a new repayment plan." CNBC quoted Education Department official Nicholas Kent noting that nearly 46,000 borrowers had already applied to enroll in RAP and relayed warnings from experts like Mark Kantrowitz that late payments under RAP quickly strip benefits. AP News put the changes in political context, summarising the Trump administration's One Big Beautiful Bill and quoting Michele Zampini on affordability: "I think a lot of people are simply going to see their payment increase significantly." The Guardian and Independent emphasised operational risk: both cited Lindsay Vail Clark and other advocates warning of processing delays and long servicer wait times. Axios synthesised the policy details and highlighted how the new Tiered Standard and RAP will eventually become the dominant pathways for new borrowers. Taken together, the outlets show consistent reporting on the rules and the risks: Business Insider and CNBC provide granular, borrower-facing detail about notices, RAP benefits, and autopay incentives; AP, Guardian and Independent stress the broader policy shift, borrowing caps, and likely hardship for many borrowers. Where reporting diverges is emphasis: CNBC and Business Insider focus on concrete borrower steps and timelines, while AP and The Guardian frame the changes as part of a wider political overhaul with potential national consequences.

Go deeper

• Which repayment plan will cost me least given my income and dependents?
• How and when will my servicer notify me of my 90-day deadline?
• Will ongoing lawsuits change my deadline or options?

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