July 1 Student Loan Deadline: What Every Borrower Must Do Before the Rules Change
7 million SAVE plan borrowers have 90 days from July 1 to pick a new repayment plan — or the government picks for them, likely at a higher monthly cost.
On July 1, 2026, the most sweeping federal student loan overhaul in a generation takes effect — and if you're one of the 7 million+ borrowers currently in the SAVE plan, you need to act before late September or the government will force you into a standard repayment plan that likely costs more and won't count toward forgiveness. A new income-driven option called the Repayment Assistance Plan (RAP) launches July 1, offering interest subsidies and a $50/month principal paydown benefit — but it comes with a 30-year forgiveness timeline, compared to 20-25 years under existing plans, and requires a minimum $10/month payment even at zero income. Here's the rule that could blindside current borrowers: if you consolidate any existing federal loans or take out a new one on or after July 1, your entire loan balance — old and new — loses access to IBR, PAYE, and most legacy repayment plans, leaving you with only RAP or a new Tiered Standard plan. SAVE borrowers should log into their servicer account now to compare IBR, ICR, PAYE, and RAP before the 90-day clock starts ticking.
This issue draws on reporting and data from Student Loan Planner.