Overview
- Federal loan servicers began sending 90-day notices to former SAVE enrollees after the transition started on July 1, 2026, and the Education Department says notices will be sent in waves with some contacts extending into 2027.
- Borrowers must choose the new Repayment Assistance Plan (RAP) or a tiered/standard plan or be automatically placed in a standard option that typically has higher monthly payments.
- RAP ties payments to adjusted gross income with required minimum payments and up to about 30 years to forgiveness, while new statutory caps limit Parent PLUS to $20,000 per year and $65,000 per dependent and set graduate limits of $20,500 per year ($100,000 total) for many programs and higher ceilings for some professional degrees.
- Implementation risks include servicer backlogs, staggered notice schedules (some servicers plan outreach into March 2027), errors in repayment tools, and interest accruing while applications are processed, which could increase missed forgiveness credit and defaults.
- The changes stem from the One Big Beautiful Bill Act (2025) and follow court rulings that both removed SAVE and temporarily blocked certain administration actions such as new PSLF restrictions and some lower graduate caps for select programs.