When Jordan’s daycare bill jumped to $900 a month, his $410 student loan payment suddenly felt impossible on a $3,600 monthly paycheck. He assumed he was stuck with that number until the loan was paid off. Income-driven repayment plans exist for exactly this situation, and which plan fits Jordan’s loans changed significantly in 2026.

A federal court struck down the SAVE repayment plan in March 2026, and the One Big Beautiful Bill Act eliminated it by law. If you were on SAVE, do not assume your old payment amount still applies. Here is what actually governs your payment now, and how to lower it the right way.

What Replaced SAVE: The Repayment Assistance Plan

According to the Department of Education, every borrower still enrolled in SAVE is being moved off it. You get a 90-day window after your servicer notifies you to pick a new plan. If you do nothing, you are placed automatically into the Standard Repayment Plan or the new Tiered Standard Plan, which does not adjust for income at all.

For any loan taken out on or after July 1, 2026, the only income-driven option is the new Repayment Assistance Plan, called RAP. Full plan details are posted at studentaid.gov’s income-driven repayment page. Under RAP, your payment is a percentage of your adjusted gross income, starting around 1 percent for lower earners and rising toward 10 percent as income increases. That amount is divided by 12 and reduced by $50 for each dependent you claim. Unlike SAVE, RAP sets a $10-a-month floor. Your payment cannot drop to zero no matter how low your income falls.

RAP includes one real advantage over older plans. If your monthly payment does not cover that month’s interest, the government covers the difference so your balance does not grow. Remaining balances are forgiven after 360 qualifying monthly payments, which works out to 30 years.

If Your Loans Are Older: IBR May Still Fit

Income-Based Repayment, known as IBR, is a separate plan created by federal statute and is not affected by the SAVE court ruling. IBR caps your payment at 10 or 15 percent of your discretionary income, depending on when you first borrowed, and that calculation can bring your required payment to zero if your income falls low enough. Forgiveness comes after 20 or 25 years of qualifying payments. If your loans predate July 2026, compare your RAP and IBR estimates using the Loan Simulator at studentaid.gov before choosing either one.

Families managing multiple financial priorities at once should also look at savings programs and budgeting resources that work alongside a lower loan payment, rather than treating the loan as the only line item that matters.

How to Enroll and Recertify Each Year

Apply for RAP or IBR through your loan servicer or directly at studentaid.gov, using your most recent tax return or recent pay stubs if your income changed. Answers to common enrollment questions are posted in Federal Student Aid’s income-driven repayment FAQ. The application is free and usually takes under 30 minutes for standard federal loans.

The detail most borrowers miss is annual recertification. You must resubmit your income and family size every year to stay on your plan. Miss that date and your payment can jump to the standard amount until you recertify. Set a reminder 60 days before your recertification date so you never lose your rate by accident.

Public Service Loan Forgiveness Still Works Alongside RAP and IBR

If you work full-time for a government agency, public school, or qualifying nonprofit, Public Service Loan Forgiveness discharges your remaining federal balance after 120 qualifying monthly payments made under RAP or IBR. That is roughly 10 years, far shorter than the 20 to 30 years available under either plan alone. Submit the PSLF Form every year so any payment-count errors get caught early, not after a decade of payments.

What Most Borrowers Get Wrong

The most common mistake is assuming your old SAVE payment or plan is still active. If you have not heard from your servicer, log into studentaid.gov and check your loan details directly rather than waiting for a letter that might already be in transit. The second mistake is missing recertification and getting bumped to a payment you cannot afford for months before catching it.

What to Do If Payments Are Still Too High

Deferment and forbearance let you pause payments temporarily during a job loss or documented hardship. Interest can keep accruing during that pause depending on your loan type, so ask your servicer directly whether capitalization applies before you use either option. Treat deferment and forbearance as a short bridge, not a long-term plan, since RAP and IBR are built to make ongoing payments sustainable without pausing anything.

Frequently Asked Questions

What happened to the SAVE plan? A federal court struck it down in March 2026, and the One Big Beautiful Bill Act eliminated it by statute. Every SAVE borrower gets a 90-day window after notification to choose a new plan. Borrowers who do nothing are moved automatically into the Standard or Tiered Standard Repayment Plan, neither of which adjusts for income.

What is the Repayment Assistance Plan (RAP)? RAP is the new income-driven plan for any loan issued on or after July 1, 2026. Your payment is a percentage of your adjusted gross income, roughly 1 to 10 percent depending on earnings, minus $50 per dependent, with a $10-a-month minimum. Remaining balances are forgiven after 30 years of qualifying payments.

Can my payment still drop to zero? Not under RAP, which has a $10 monthly floor. Income-Based Repayment, an older statutory plan unaffected by the SAVE ruling, can still bring your payment to zero if your income falls low enough. Compare both using the Loan Simulator at studentaid.gov if your loans predate July 2026.

What is the most common mistake with income-driven plans? Missing annual recertification. You must resubmit your income and family size every year, and missing the deadline can bump your payment to the standard amount until you recertify. Set a reminder 60 days ahead of your date.

Does Public Service Loan Forgiveness still work with RAP? Yes. Full-time government, public school, and qualifying nonprofit employees can have their remaining balance discharged after 120 qualifying payments under RAP or IBR. That is about 10 years, instead of the 20 to 30 years under either plan alone. Submit the PSLF Form annually to catch payment-count errors early.