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SAVE is gone. A federal court vacated the plan on 10 March 2026, and the One Big Beautiful Bill Act eliminated it by statute. Borrowers who were enrolled began receiving servicer notifications from 1 July 2026 with a 90-day window to choose a different plan. Anyone who does not choose is moved automatically to the Standard or new Tiered Standard plan, which generally carry higher payments than income-driven repayment. If you were on SAVE and are pursuing Public Service Loan Forgiveness, you must switch to another IDR plan to stay eligible.

The Repayment Assistance Plan launched on 1 July 2026 and replaces SAVE as the main income-driven option. Payments run from 1% to 10% of adjusted gross income depending on income tier, with a $10 monthly minimum. Forgiveness comes after 30 years — longer than any plan it replaced. Its distinguishing feature is an interest subsidy that stops your balance growing when your payment does not cover accruing interest, which was the main complaint about older IDR plans.

For non-PSLF forgiveness, yes. The American Rescue Plan Act exemption that made forgiven balances tax-free expired on 31 December 2025 and was not extended. Anyone receiving income-driven repayment forgiveness from 2026 onward may owe federal income tax on the forgiven amount, and state treatment varies. Public Service Loan Forgiveness remains tax-free. This matters enormously for planning: 30 years of RAP payments followed by a taxable forgiveness event is a very different outcome from what SAVE promised.

It depends on when you borrowed. If all your loans were disbursed before 1 July 2026, you can still use IBR, and PAYE and ICR until they sunset on 1 July 2028, after which IBR and RAP are the only income-driven options. If you take out any new federal loan on or after 1 July 2026, your only choices for all your loans are RAP and the new Tiered Standard plan. One piece of good news: forgiveness credit carries across plans, so qualifying payments you have already made count wherever you move.

Compare your loan APR against what the money would earn elsewhere. At 4–5% the arithmetic often favours investing; at 7% or above, paying early is close to a guaranteed return at that rate and usually wins on a risk-adjusted basis. Two rules hold regardless: never miss the minimum, and never give up an employer retirement match to pay loans faster — that match is an immediate 50–100% return no loan rate matches. Also weigh what you would give up: extra payments on federal loans do not buy back the protections you keep by staying enrolled.

On a $37,000 balance at 6.5% with the standard 10-year payment of about $420, adding $100 a month clears the loan in roughly 96 months instead of 120 and saves about $2,800 in interest. At $200 a month extra it finishes in about 80 months and saves roughly $4,600. The effect compounds because every extra dollar of principal removes the interest that dollar would have generated for the rest of the term. There is no prepayment penalty on federal loans or on virtually any private loan.

PSLF cancels the remaining balance on federal Direct Loans after 120 qualifying monthly payments — ten years — while working full-time for a government body or a qualifying 501(c)(3) nonprofit. It is one of the few forms of forgiveness that remains tax-free. Most borrowers need to be on an income-driven plan for the payments to count, which is why former SAVE enrollees pursuing PSLF had to move to another IDR plan. Recertify employment annually rather than at the end.

Substantially. Graduate PLUS loans have been eliminated, so graduate and professional students now face strict borrowing caps. Parent PLUS is capped at $20,000 per year and $65,000 lifetime per student. The window to consolidate Parent PLUS loans in order to reach an income-driven plan closed on 30 June 2026, leaving those borrowers with the Standard, Extended, Graduated or Tiered Standard plans and no income-driven path. If you are modelling costs for a degree not yet started, these caps change what is borrowable.

Federal loans carry fixed rates, income-driven repayment, deferment and forbearance protections, and access to PSLF. Private loans have stricter terms, few protections, and credit-based pricing that often needs a cosigner. The only real reason to choose private is a materially lower rate with strong credit. Refinancing federal into private surrenders every federal protection permanently, and that decision cannot be reversed.

For private-to-private the calculation is simple: if rates have fallen or your credit has improved, refinance. For federal-to-private it is a much heavier decision, and the 2026 changes cut both ways. Forgiveness being taxable again and RAP's 30-year timeline make federal forgiveness less valuable than it looked, which strengthens the case for refinancing if you have stable high income and will never need income-driven repayment or PSLF. But you are trading away protections you cannot buy back, so only do it if your income is genuinely secure.

Federal loans enter default after 270 days of non-payment. Consequences include wage garnishment up to 15%, seizure of tax refunds, garnishment of Social Security, loss of eligibility for further federal aid, a credit-score drop often exceeding 100 points, and collection fees. Recovery is possible through rehabilitation — nine voluntary on-time payments removes the default — or through consolidation. Private lenders sue and obtain judgments instead, with consequences varying by state. Contact your servicer before you reach 270 days; the options while current are far better than the options after.

Rarely, but the door is not closed. Federal guidance issued in 2022 made the process somewhat more navigable: borrowers demonstrate undue hardship through a separate adversarial proceeding, generally assessed against present hardship, future inability to repay, and good-faith effort. Success rates remain low and the process is expensive enough to need a bankruptcy attorney. For most borrowers an income-driven plan or PSLF is the more realistic route.