Personal Finance | September 29, 2026 | Capstag.com | 10 min read
Student Loan Repayment Calculator: Standard vs Income-Driven Plans
Federal student loan repayment changed more in 2026 than in the previous decade combined. If your understanding of your repayment options is based on anything you learned before this year, it is very likely outdated — and calculating your real numbers under the current rules is essential before choosing a plan.
Quick Answer: As of July 1, 2026, the SAVE plan has been eliminated, and two new plans have launched: the Repayment Assistance Plan (RAP), a new income-driven option, and the Tiered Standard Plan, a fixed-payment option based on loan balance rather than income. Under RAP, monthly payments are calculated as a percentage of adjusted gross income on a sliding scale, capped between 1% and 10% of AGI. Standard Repayment amortizes the balance over 10 years (up to 30 for consolidation loans) with equal fixed monthly payments. Borrowers who were in SAVE received exit notices starting July 2026 and have 90 days to choose a new plan before automatic enrollment in Standard or Tiered Standard Repayment.
The student loan repayment landscape underwent its most significant restructuring in over a decade during 2026, driven by the One Big Beautiful Bill Act (OBBBA) and a federal court ruling that vacated the SAVE plan in March 2026. Millions of borrowers who built their financial plans around SAVE's income-driven protections now need to recalculate their options under an entirely new framework. As a finance strategist, understanding exactly what changed — and calculating the real monthly payment difference between the new plans — is essential for any borrower affected by these changes, which is effectively every federal student loan borrower.
What Changed: The 2026 Student Loan Overhaul
According to the U.S. Department of Education, a federal court in the Eastern District of Missouri vacated the SAVE plan on March 10, 2026, and starting July 1, 2026, federal loan servicers began issuing exit notices to the approximately 7.5 million borrowers enrolled in SAVE, instructing them to select a legal repayment plan within 90 days. Borrowers who do not respond within that window are automatically enrolled in either the Standard Repayment Plan or the new Tiered Standard Plan.
The Two-Track System Based on Loan Disbursement Date: The new rules create two distinct sets of options depending on when a borrower's loans were disbursed. Existing borrowers who took out all their loans before July 1, 2026, retain most existing repayment options and gain access to the new RAP plan. Borrowers who take out any new loans, or consolidate existing loans, on or after July 1, 2026, are limited to only two options going forward for all their loans: RAP or the Tiered Standard Plan. This distinction matters significantly for anyone still in school or planning to take out additional loans.
The Tiered Standard Plan — New Fixed-Payment Option
The Tiered Standard Plan is the new default repayment option for borrowers with at least one Direct Loan first disbursed on or after July 1, 2026. Unlike SAVE or RAP, monthly payment and repayment period are based purely on total federal Direct Loan debt, not income or family size. The repayment period is 10, 15, 20, or 25 years depending on balance size, with a minimum payment of $50 required.
Tiered Standard Plan and PSLF: Payments made under the Tiered Standard Plan do not count toward Public Service Loan Forgiveness (PSLF). Borrowers pursuing PSLF eligibility must ensure they are enrolled in a qualifying plan — RAP or one of the surviving legacy income-driven plans — rather than the Tiered Standard Plan, which does not accrue PSLF credit regardless of employment in a qualifying public service role.
The Repayment Assistance Plan (RAP) — The New Income-Driven Option
RAP is the new income-driven repayment plan replacing Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE), both of which stop accepting new enrollees on July 1, 2026 and sunset entirely by July 1, 2028. Under RAP, monthly payment is calculated as a percentage of adjusted gross income (AGI) on a sliding scale.
| RAP Feature | Detail |
|---|---|
| Minimum payment | $10/month (borrowers earning $10,000 or less annually) |
| Maximum payment | 10% of AGI |
| Dependent reduction | $50 reduction per eligible dependent, minimum $10/month |
| Forgiveness timeline | 30 years of qualifying payments |
| Interest accumulation | Protected against runaway growth even during low-payment periods |
According to titanprep's 2026 analysis, RAP caps payments between 1% and 10% of earnings and protects against runaway interest accumulation, meaning the balance does not grow uncontrollably even when payments are low — a structural protection carried forward from the design principles behind SAVE, though implemented differently.
RAP's 30-Year Forgiveness Timeline vs PSLF: RAP provides loan forgiveness after 30 years of qualifying payments — a considerably longer timeline than the 10 years required for Public Service Loan Forgiveness for borrowers working in qualifying public service employment. Borrowers eligible for PSLF should generally prioritise that pathway over relying on RAP's 30-year forgiveness provision, given the dramatically shorter timeline PSLF offers for eligible employment.
Standard Repayment Plan — Still Available, Now the Baseline Comparison
According to Titan Prep's 2026 guide, the Standard Repayment Plan amortizes a loan balance over 120 months (10 years) with equal fixed monthly payments — meaning the payment amount never changes and the loan is fully paid off in exactly 10 years, using the identical amortization mathematics covered elsewhere in this calculator series. For consolidation loans, the term can extend up to 30 years, though the same fixed-payment logic applies throughout.
A Fully Worked Comparison
Borrower: $45,000 in federal student loan debt, $52,000 adjusted gross income, no dependents.
| Plan | Est. Monthly Payment | Total Interest (Approx.) |
|---|---|---|
| Standard Repayment (10-year, 6% rate) | ~$500 | ~$15,000 |
| RAP (10% of AGI cap, no dependents) | ~$433 (10% of AGI ÷ 12) | Varies — 30-year forgiveness eligible |
| Tiered Standard (balance-based tier) | Varies by tier — 10-25 year term | Higher total interest over longer terms |
Illustrative estimates — actual figures depend on specific loan terms, exact income, and current program rules at time of application.
Standard Repayment pays the least total interest of any federal repayment option when the borrower can afford the higher fixed monthly payment throughout the term, since it has the shortest standard term (10 years) among the options. RAP and Tiered Standard trade a potentially lower or more manageable monthly payment against a longer overall repayment timeline and, in RAP's case, income-based recertification requirements.
How to Choose: The Key Decision Factors
Can you comfortably afford the Standard Repayment amount? If yes, Standard Repayment typically minimises total interest paid over the life of the loan, given its shorter fixed term compared to Tiered Standard's extended tiers or RAP's income-based, potentially longer timeline.
Is your income currently low relative to your loan balance? RAP's income-based payment structure, capped at 10% of AGI with a low minimum for very low earners, provides meaningful payment relief during lower-income periods, at the cost of a much longer 30-year path to forgiveness if the balance is not paid off through regular payments before then.
Are you pursuing Public Service Loan Forgiveness? Confirm your chosen plan qualifies for PSLF credit — the Tiered Standard Plan does not count toward PSLF, while RAP and surviving legacy plans generally do, though borrowers should verify current qualifying plan status directly with their servicer given the pace of ongoing changes.
From a Risk Management Perspective: Given how significantly and recently these rules have changed, and the pace of ongoing implementation through 2026 and 2028, any student loan repayment decision should be verified directly against current official Department of Education guidance and your specific loan servicer's current plan offerings at the time of the decision, rather than relying solely on a general comparison like this one. The specific numbers, thresholds, and even plan availability continue to evolve as implementation proceeds.
Conclusion
The 2026 student loan repayment overhaul eliminated the SAVE plan and introduced two new options — the income-based Repayment Assistance Plan (RAP) and the balance-based Tiered Standard Plan — fundamentally changing the calculation every federal borrower needs to run. Standard Repayment remains available and typically minimises total interest for borrowers who can afford its fixed payment; RAP provides income-based flexibility with a longer 30-year forgiveness timeline; and the Tiered Standard Plan offers a balance-based fixed payment without PSLF eligibility. Given the scale and recency of these changes, verifying current details directly with your loan servicer before selecting or changing a plan is essential. Use our free calculators to model related debt payoff scenarios. For the broader debt payoff mechanics this calculation is built on, see our guide on Debt Payoff Calculator: How to Calculate Your Debt-Free Date.
✅ Key Takeaways
- The SAVE plan was vacated by a federal court in March 2026 and formally eliminated; exit notices to its 7.5 million enrollees began July 1, 2026, with a 90-day window to choose a new plan
- Two new plans launched July 1, 2026: RAP (income-driven, payments capped between 1-10% of AGI, 30-year forgiveness) and the Tiered Standard Plan (fixed payment based on loan balance, 10-25 year terms)
- Borrowers with loans disbursed on or after July 1, 2026 are limited to only RAP or Tiered Standard for all their federal loans going forward
- PAYE and ICR stop accepting new enrollees July 1, 2026 and sunset entirely by July 1, 2028; IBR is the only legacy income-driven plan surviving long-term
- The Tiered Standard Plan does not count toward Public Service Loan Forgiveness — borrowers pursuing PSLF should confirm their plan qualifies before enrolling
- Standard Repayment (10-year, fixed payment) typically minimises total interest paid for borrowers who can afford the higher monthly payment throughout the term
- Given the pace of ongoing implementation, verify current plan details and eligibility directly with your loan servicer before making a final decision
Frequently Asked Questions
What happened to the SAVE student loan repayment plan?
The SAVE plan was vacated by a federal court in the Eastern District of Missouri on March 10, 2026, and formally eliminated as part of the broader student loan overhaul under the One Big Beautiful Bill Act. Starting July 1, 2026, loan servicers began sending exit notices to the approximately 7.5 million borrowers enrolled in SAVE, giving them 90 days to select a new legal repayment plan before automatic enrollment in Standard Repayment or the Tiered Standard Plan.
What is the Repayment Assistance Plan (RAP)?
RAP is the new federal income-driven repayment plan launched July 1, 2026, replacing Income-Contingent Repayment and Pay As You Earn. Monthly payments are calculated as a percentage of adjusted gross income on a sliding scale, capped between 1% and 10% of AGI, with a reduced minimum for very low earners and a $50 reduction per eligible dependent. RAP provides loan forgiveness after 30 years of qualifying payments.
What is the Tiered Standard Plan?
The Tiered Standard Plan is a new fixed-payment repayment option launched July 1, 2026, available to borrowers with at least one Direct Loan disbursed on or after that date. Unlike income-driven plans, monthly payment and repayment term (10, 15, 20, or 25 years) are based on total loan balance, not income or family size. Payments under this plan do not count toward Public Service Loan Forgiveness.
Which student loan repayment plan pays the least total interest?
The Standard Repayment Plan, with its 10-year fixed term, typically results in the least total interest paid among federal repayment options, provided the borrower can afford the fixed monthly payment throughout. Longer repayment terms under the Tiered Standard Plan or income-driven plans like RAP generally result in more total interest paid over the life of the loan, in exchange for lower or more flexible monthly payments.
Do I need to switch plans if I was enrolled in SAVE?
Yes. Since SAVE has been eliminated, all former SAVE enrollees must select a new legal repayment plan within the 90-day window communicated by their loan servicer starting July 1, 2026. Borrowers who take no action are automatically enrolled in either the Standard Repayment Plan or the new Tiered Standard Plan, which may not be the most favourable option for every borrower's specific financial situation.
This article is for educational purposes only. The information provided reflects general financial principles and does not constitute personalised financial, tax, or legal advice. Student loan regulations are subject to ongoing change — always verify current details directly with your loan servicer or the Department of Education. Always consider your own financial circumstances before making any decisions.
