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RAP Is Live: The One Move 7.5 Million SAVE Borrowers Need to Make This Week
This episode covers the end of the SAVE student loan repayment plan and what the 7.5 million borrowers affected by its elimination need to do before their 90-day window closes. Host Derek Wu walks through the three plans now available — RAP, IBR, and Tiered Standard — and explains what each one actually costs using a concrete example: a single borrower earning $45,000 with $35,000 in debt.
Understanding your options matters because inaction has a specific, measurable cost. Borrowers who do not choose a plan will be auto-enrolled in the Tiered Standard Plan, which has no income adjustment and no forgiveness path. The difference between plans is not abstract — RAP comes in at $150 per month for the example borrower, while IBR lands at $176, and Tiered Standard offers no flexibility at all. But monthly payment is only part of the picture.
Derek also breaks down a forgiveness-credit asymmetry that most servicer notifications will not explain: prior payments made on other income-driven plans can transfer into RAP, but RAP payments may not count toward IBR's forgiveness clock. Switching into RAP can also extend a 20-year forgiveness timeline to 30 years. These are one-way decisions with long-term consequences, and the right answer depends on where you already are in the repayment process.
- The 90-day clock is personal. Servicers began sending notices on July 1, 2026. The deadline is calculated from your individual notice date, not a single universal cutoff.
- Tiered Standard is the default — and the most expensive long-term choice. It offers no income adjustment and no forgiveness, regardless of how long you pay.
- RAP offers a $50 government principal match and lower monthly payments, but extends forgiveness eligibility from 20 to 30 years compared to IBR.
- Credit portability is a one-way door. Prior IDR payments count toward RAP forgiveness, but RAP payments may not transfer back to IBR's timeline.
- One action this week: Log into StudentAid.gov, run the Loan Simulator, and enroll in autopay before September 30, 2026 for a 1% interest rate reduction through June 2028.
If you have made a repayment decision after listening, subscribe to Coin Flip for future episodes. If you have a financial choice you are working through, leave it in the reviews — it may be the subject of a future episode.
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By Coin FlipThis episode covers the end of the SAVE student loan repayment plan and what the 7.5 million borrowers affected by its elimination need to do before their 90-day window closes. Host Derek Wu walks through the three plans now available — RAP, IBR, and Tiered Standard — and explains what each one actually costs using a concrete example: a single borrower earning $45,000 with $35,000 in debt.
Understanding your options matters because inaction has a specific, measurable cost. Borrowers who do not choose a plan will be auto-enrolled in the Tiered Standard Plan, which has no income adjustment and no forgiveness path. The difference between plans is not abstract — RAP comes in at $150 per month for the example borrower, while IBR lands at $176, and Tiered Standard offers no flexibility at all. But monthly payment is only part of the picture.
Derek also breaks down a forgiveness-credit asymmetry that most servicer notifications will not explain: prior payments made on other income-driven plans can transfer into RAP, but RAP payments may not count toward IBR's forgiveness clock. Switching into RAP can also extend a 20-year forgiveness timeline to 30 years. These are one-way decisions with long-term consequences, and the right answer depends on where you already are in the repayment process.
- The 90-day clock is personal. Servicers began sending notices on July 1, 2026. The deadline is calculated from your individual notice date, not a single universal cutoff.
- Tiered Standard is the default — and the most expensive long-term choice. It offers no income adjustment and no forgiveness, regardless of how long you pay.
- RAP offers a $50 government principal match and lower monthly payments, but extends forgiveness eligibility from 20 to 30 years compared to IBR.
- Credit portability is a one-way door. Prior IDR payments count toward RAP forgiveness, but RAP payments may not transfer back to IBR's timeline.
- One action this week: Log into StudentAid.gov, run the Loan Simulator, and enroll in autopay before September 30, 2026 for a 1% interest rate reduction through June 2028.
If you have made a repayment decision after listening, subscribe to Coin Flip for future episodes. If you have a financial choice you are working through, leave it in the reviews — it may be the subject of a future episode.