What’s changing with student loans this summer?

If you have federal student loans, this summer brings some of the biggest changes to the repayment system in years. A new repayment plan is launching, a popular existing plan is ending and some borrowers are facing deadlines. Here’s what you need to know — and what to do before July 1.

A new repayment plan is launching

Starting July 1, 2026, a new income-driven repayment option, the Repayment Assistance Plan (RAP), becomes available. Income-driven plans tie your monthly payment to your income rather than your loan balance, which can make repayment significantly more affordable. RAP will be the only income-driven option available for borrowers taking out new loans going forward. For existing borrowers, RAP is one of several repayment options available (alongside Income-Based Repayment (IBR), and until 2028, Pay As You Earn (PAYE)/Income-Contingent Repayment (ICR).

If you’re already in a repayment plan, you may be able to stay in your current plan — but this is a good moment to make sure you’re on the one that saves you the most.

If you’re in the SAVE plan, act now

The SAVE plan is officially ending. Over 7.5 million borrowers have been in administrative forbearance while the plan was tied up in courts, but that’s coming to a close. Starting July 1, servicers will begin sending notices giving borrowers 90 days to switch to a qualifying plan. If you don’t act within 90 days of your notice, you’ll be automatically moved to one of the fixed-payment plans (e.g. 10-year standard repayment plan) — typically the most expensive option, with payments based on your loan balance rather than your income.

It’s best to be proactive before you get your notice. There are other income-driven repayment plans worth looking at as an alternative.

Parent PLUS borrowers face a hard deadline

If you have unconsolidated Parent PLUS loans, you must consolidate them before July 1 to keep access to income-driven repayment and forgiveness programs. After that date, that access is gone permanently. Important: This is a disbursement deadline, not an application deadline. Your Direct Consolidation Loan must be fully processed and disbursed by June 30, 2026, not just submitted.

Although the April 1 date has passed, you can still apply to consolidate, but applications submitted now can take four to six weeks to be processed (and often longer given current backlogs), so an application started now is unlikely to be disbursed before the June 30 cutoff and would be at your own risk. If you have already started, see it through. If you have not, check your options with Savi before applying. Taking any NEW Parent PLUS loan after July 1 forfeits income-driven repayment and forgiveness access for ALL Parent PLUS loans — including older ones already consolidated.

Not sure where you stand? Here’s a quick checklist

• In the SAVE Plan: Start preparing now. You’ll need to change your plan this summer.
• Have Parent PLUS loans: Understand the benefits and risks of consolidating this close to the July 1 deadline before taking action.
• On IBR, PAYE, or another IDR plan: Review your options to make sure you’re maximizing savings.
• New to repayment or taking out new loans after July 1: RAP will be your income-driven option — understand what it means for your payments.

Navigate these changes with Savi

If you’re looking for help understanding your student loan options, Savi offers guidance, education, monthly workshops and additional resources that can help you navigate repayment decisions. Visit Savi’s student loan guidance resources to learn more.