What changed
The short version: the plan seven million people were on no longer exists, the replacement costs most of them more, and there's a deadline attached to your name specifically.
The timeline
Late 2025
A legal settlement retires the SAVE plan.
2025-08-01
Interest starts running again on SAVE balances. Borrowers sit in administrative forbearance, making no payments while the balance grows.
2026-07-01
RAP and the Tiered Standard Plan open. Servicers begin writing to borrowers, staggered across months.
Your notice date, plus 90 days
Your personal deadline to enroll. Notices are staggered, so your neighbour's deadline isn't yours.
2028-07-01
ICR and PAYE end. From this date the income-driven choice depends on when you first borrowed: loans taken only before July 2014 keep the original IBR or RAP; loans taken between 2014 and July 2026 get the updated IBR or RAP; and anyone with a loan taken on or after 1 July 2026 has RAP only.
Why your payment probably goes up
SAVE calculated payments on the income you earned above 225% of the poverty line. RAP calculates them on your entire income. Same salary, much bigger base.
Take someone earning $55,000 with no dependants. Under SAVE a large slice of that income was protected before any percentage applied. Under RAP the 5% band applies to the whole $55,000, which works out at about $229 a month. RAP also stretches forgiveness to 30 years, where SAVE reached it in 20 or 25.
RAP does give two things back: unpaid interest is waived rather than capitalized, and $50 of principal is credited every month. Your balance can't grow. For someone with a large balance and a low income, that matters a great deal.
If you borrowed on or after 2026-07-01
You have two options only: RAP and the Tiered Standard Plan. IBR, ICR, PAYE, Graduated and Extended are closed to you. Consolidating an older loan after that date moves it into the same restriction, so consolidate carefully.
What happens if you ignore the letter
Your servicer places you on a plan of their choosing when the window closes. That's frequently the most expensive plan you qualify for, and it's not chosen with your circumstances in mind. Choosing yourself takes an afternoon and is free.
Public Service Loan Forgiveness
PSLF still exists, and RAP counts toward it. The Tiered Standard Plan doesn't. If you work for a government body or a qualifying non-profit and you're counting months toward PSLF, moving onto the Tiered Standard Plan stops that clock. This is the most consequential mistake available in the whole transition.
Watch for scams around this. A confusing deadline affecting millions of people is exactly what fraud waits for. Nobody should charge you to enroll in a repayment plan, apply for forgiveness or consolidate. All of it is free at studentaid.gov. No legitimate organization will ask for your FSA ID password. If someone promises immediate forgiveness for a fee, report them at reportfraud.ftc.gov.