2026 Student Loan Pivot Calculator

The SAVE plan is dead. Compare the new RAP vs. Standard vs. Legacy IDR — and calculate your future tax bomb before it surprises you.

Deadline to Switch from SAVE: July 1, 2026

After this date, borrowers remaining on SAVE will be auto-enrolled in Standard repayment — payments could double or triple.

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2026 Student Loan Plan Comparison

Compare Standard, RAP, and Legacy IDR — including the full tax bomb at forgiveness.

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Tax Bomb Warning (Effective Jan 1, 2026)

Under the OBBBA, all forgiven student loan balances are once again taxable as ordinary income. A $60,000 forgiven balance in the 22% bracket creates a $13,200 surprise tax bill in the year of forgiveness.

Plan Comparison at 6.39% Interest

Standard 10-Year
$508.45/mo
Total Paid over 10 yrs$61,014

Fixed payment. No forgiveness. No tax bomb. Pays off fastest.

RAP — Repayment Assistance PlanLowest Cost
$541.67/mo
Total Paid over 30 yrs$59,572

Forgiveness after 30 years. Tax bomb applies on $0 forgiven balance.

Legacy IBR (Pre-July 2026 only)
$346.04/mo
Total Paid over 20 yrs$76,833

Available only for loans taken before July 1, 2026. Forgiveness after 20 years.

Total Cost Comparison (including tax bomb)

Standard 10-yr$61,014
RAP (30-yr)$59,572
Legacy IBR (20-yr)$76,833

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How the OBBBA Ended the SAVE Plan: What to Do by July 1st

What Happened to SAVE?

The SAVE (Saving on a Valuable Education) plan — the Biden-era IDR plan that offered 5% of discretionary income payments and 100% interest subsidies — was officially eliminated by the One Big Beautiful Bill Act (OBBBA), signed in early 2026. Approximately 7.5 million borrowers were enrolled in SAVE when it was struck down.

The Department of Education has given borrowers a 90-day transition window expiring July 1, 2026. After this date, any borrower still listed as SAVE will be automatically defaulted to the Standard 10-Year repayment plan — which could more than double monthly payments for many enrolled borrowers.

The New Repayment Assistance Plan (RAP): Key Facts

  • Payment amount: 10% of AGI, divided by 12. If AGI is under $10,000, the payment is a flat $10/month.
  • Interest subsidy: Gone. Interest accrues in full. If your RAP payment doesn't cover interest, your balance can grow.
  • Forgiveness: After 30 years (360 months) of qualifying payments.
  • Tax bomb: Effective January 1, 2026, forgiven amounts are taxable as ordinary income. The temporary ARPA exclusion has expired.
  • Eligibility: All federal Direct Loans. FFEL loans must be consolidated first.

The 2026 Tax Bomb: How to Prepare

The biggest hidden danger in IDR plans is the tax bill at the end. If you carry $80,000 in debt that gets forgiven after 30 years, that $80,000 (plus any accrued interest) is added to your taxable income in the year of forgiveness. In the 22% bracket, that's a $17,600 unexpected tax bill. In the 32% bracket, it's over $25,000.

Financial planners recommend that borrowers planning on forgiveness open a high-yield savings account or brokerage account now and contribute monthly to build a "tax bomb fund." Even putting $50–$100/month away over 30 years, compounded, can fully cover the eventual liability.

2026 Federal Student Loan Interest Rates

Interest rates on federal student loans disbursed for the 2025–26 academic year are fixed for the life of the loan:

  • Undergraduate Direct Loans: 6.39%
  • Graduate Direct Unsubsidized: 7.94%
  • Parent PLUS / Grad PLUS: 8.94%

High-credit borrowers may find private refinancing rates of 4.5–5.5% attractive — but refinancing permanently removes access to all federal programs including RAP, Legacy IDR, and any future forgiveness initiatives.