What happened to SAVE
July 2023: SAVE replaced REPAYE as the most generous income-driven plan ever offered. • 5% of discretionary income (undergrad), 10% (grad) • 225% of poverty line shielded (was 150% under prior plans) • Forgiveness after 10 years for borrowers with $12K original balance • Interest waived if monthly payment didn't cover interest • 8+ million borrowers enrolled by end of 2024
April 2024: Texas-led lawsuit filed alleging SAVE exceeded Biden's authority.
: 8th Circuit injunction. Department of Education placed all SAVE borrowers in forbearance. Months in forbearance did NOT count toward PSLF or IDR forgiveness, but also no interest accrued. Effectively, 8 million borrowers got a year+ of free pause.
: 8th Circuit permanent ruling - SAVE was unauthorized. Department of Education must wind down.
2025 Department of Education plan: • Q1 2026: notify all SAVE enrollees of plan termination • Q2 2026 (now): borrowers must select a new plan or be auto-moved to IBR • Forbearance ends as new plan begins • Interest resumes accruing for everyone
status: 5.2 million borrowers still in SAVE forbearance, transition continuing.
Your IDR options in 2026 (post-SAVE)
The remaining income-driven repayment plans:
1. Income-Based Repayment (IBR) • 10% of discretionary income if your loans are post-July 2014 (called "New IBR" or "IBR 2014") • 15% of discretionary income if loans pre-July 2014 ("Old IBR") • Discretionary = AGI minus 150% of poverty line • Forgiveness after 20 years (new IBR) or 25 years (old IBR) • PSLF qualifies • Available to anyone (no income cap)
2. Pay As You Earn (PAYE) • 10% of discretionary income • Forgiveness after 20 years • Loans must be post-October 2007 AND borrower received disbursement after October 2011 • Partial financial hardship requirement • PSLF qualifies
3. Income-Contingent Repayment (ICR) • Lesser of: 20% of discretionary OR fixed 12-year payment • Discretionary = AGI minus 100% of poverty line (less generous than IBR) • Forgiveness after 25 years • PSLF qualifies • Required if you have Parent PLUS loans (after consolidation)
4. Standard Plan (10-year) • Fixed monthly payment • Not income-driven • Doesn't qualify for PSLF (unless on Standard via Direct Consolidation Loan as backup) • Best for those who can afford it and want fastest payoff
5. Extended Plan / Graduated Plan • Stretches term to 25 years (Extended) or graduates payments (Graduated) • No PSLF eligibility • Useful for borrowers without IDR access
Default move from SAVE: Department of Education is auto-moving to IBR (new) if you don't make a choice within 60 days of notification.
| Plan | Monthly payment | Forgiveness | PSLF eligible |
|---|---|---|---|
| SAVE (no longer available) | $67 | 10 years (small balance) | Yes |
| IBR (new, post-2014 loans) | $228 | 20 years | Yes |
| PAYE | $228 | 20 years | Yes |
| ICR | $582 | 25 years | Yes |
| Standard 10-year | $424 | None | No |
| Extended 25-year | $224 | None | No |
| Profile | SAVE payment | IBR payment | Monthly increase |
|---|---|---|---|
| Single $50K, $40K debt | $67 | $228 | +$161 |
| Family of 4 $90K, $80K debt | $82 | $360 | +$278 |
| Single $75K, $60K debt | $170 | $425 | +$255 |
| Doctor $200K, $300K debt | $1,376 | $1,478 | +$102 |
| Teacher $55K, $45K debt | $92 | $233 | +$141 |
Payment shock by income level
Single borrower, $50,000 AGI, $40,000 federal loan balance (undergrad):
Poverty line single 2026: $15,060 • SAVE: 5% × (50K - 225%×15K) = 5% × $16,115 = $806/year = $67/month • New IBR: 10% × (50K - 150%×15K) = 10% × $27,410 = $2,741/year = $228/month • PAYE: 10% × $27,410 = $228/month • ICR: 20% × (50K - 100%×15K) = 20% × $34,940 = $582/month
Payment shock from SAVE → IBR: +$161/month
Family of 4, $90,000 AGI, $80,000 federal loan balance:
Poverty line family of 4 2026: $31,200 • SAVE: 5% × (90K - 225%×31.2K) = 5% × $19,800 = $82/month • IBR: 10% × (90K - 150%×31.2K) = 10% × $43,200 = $360/month • PAYE: $360/month • ICR: 20% × (90K - 100%×31.2K) = 20% × $58,800 = $980/month
Payment shock from SAVE → IBR: +$278/month
Doctor/dentist, $200,000 AGI, $300,000 federal loan balance (grad): • SAVE: 10% × (200K - 33,885) = $1,376/month • IBR: 10% × (200K - 22,590) = $1,478/month • PAYE: $1,478/month
Payment shock minor here (high earner), but interest waiver under SAVE is gone - unpaid interest now accrues.
PSLF: where things stand
Public Service Loan Forgiveness (PSLF) - working for government or qualifying non-profit for 10 years - was NOT struck down. It survives intact.
What's changed for PSLF in 2026: • Forbearance months (Aug 2024 - your transition date 2026) did NOT count • Once you're on a qualifying plan (any IDR), payments count again • If you transition Q2 2026, you might be 12-18 months behind your pre-SAVE PSLF timeline • PSLF count is automatically tracked at studentaid.gov
The good news: PSLF One-Time Adjustment • Through July 2026, ED is counting periods of forbearance, deferment, and missed-payment status toward PSLF • If you've been working in public service for 10+ years, you may already have 120 qualifying payments after the adjustment • ~600,000 borrowers approved for forgiveness via this adjustment 2024-2025
2026 PSLF checklist: 1. Confirm your employer is a qualified PSLF employer at studentaid.gov 2. Re-certify employment annually using the PSLF Form 3. Be on a qualifying IDR plan (IBR, PAYE, or ICR) 4. Make 120 qualifying payments 5. Apply for forgiveness via studentaid.gov
Trump administration approach: 2025 budget proposals included PSLF eligibility cuts (specifically: removing public service employers like teachers and nurses). Congress did not pass. PSLF remains in place but politically vulnerable.
Strategy: how to handle your loans in 2026
Step 1: Know your numbers • Total federal loan balance: studentaid.gov • Current AGI: your most recent tax return • Family size: as of today • Career trajectory: public service path? high-income private?
Step 2: Run the IDR comparison • Use Department of Education's Loan Simulator (studentaid.gov/loan-simulator) • Compare IBR, PAYE, ICR side-by-side • Don't just default to IBR if PAYE is available
Step 3: Decide on PSLF pursuit • If you have a public service job: stay on lowest IDR plan that qualifies (IBR or PAYE) • If you don't: consider higher payment plans to minimize interest • If unsure: stay on IDR while you decide
Step 4: Re-certify income annually • IDR plans require annual income recertification • Use last year's tax return (lowest AGI year benefits you) • Missed recertification = transition to Standard Plan automatically
Step 5: Consider strategic moves • Married couples filing separately: if your spouse earns more, MFS lowers your AGI for IDR calculation. Costs you ~$1-3K in tax usually but can save $5-15K on loan payments. Math depends on numbers. • HSA / 401(k) maxing: reduces AGI used for IDR calc • Refinancing private (NOT FEDERAL) loans: only consider if you don't need IDR or PSLF
Step 6: Watch the political landscape • Trump administration may propose loan cap or alternative • 2026 mid-terms could shift congressional balance • Don't over-pay if forgiveness might come
The honest answer for most borrowers: SAVE is gone, IBR is your new home, payments are up $150-$300/month, and you should plan accordingly. The hope of student loan forgiveness via executive action is dead for the next 2+ years.
Run the math for your situation
Use our 🇺🇸 United States calculator to plug in your own numbers.