What to Do Before Your Student Loan Payment Jumps to $900
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Why is the SAVE student‑loan plan dead and what does that mean for borrowers?
Ан Николай, Спер'я Дік ⁇ то. It's time for some money reaction.
Uh open your student loan account. I know, I know, I'll wait. If you have been living in safe plan limbo for the last two years, we are out of purgatory because the letter is coming. Maybe it's actually already in your inbox, and it starts a clock that if you ignore it, could take your payment from $0 to $900 overnight. Here's everything that we know that's going on. Going on. Save the Biden era plan that gave millions of people tiny or zero dollar payments is dead. So RIP rest in peace. A federal appeals court got rid of it back in March, and the one big, beautiful bill act mixed it again for good measure. About 7 million people were parked in Save Forbearance. That waiting is now over. Starting July 1st, servicers began
Mailing 90-day notices going out in tranches all the way into next year. So if you haven't gotten yours, I'm sorry, it doesn't mean that it missed you. It is coming. Once it actually lands, you've got 90 days to pick a new plan. And if you don't pick a plan, your servicer picks a plan for you and drops you into the standard plan that does not care about your income. It takes your balance, splits it over. Fixed term and then sends you a bill. In other words, it is not gonna pick the best plan for you. This is maybe the best example of a problem that keeps coming up again and again in personal finance land. Doing nothing feels safe in the moment, but it is often the single most expensive move you can make in the long run.
More than half of the people on save had a zero dollar payment. Get auto-enrolled in a standard. Plan on an $80,000 balance, and all of a sudden you are staring down about 900 bucks a month. Okay, one last doom and gloom point, I promise, and then I'm moving on to tell you what you can do about it. While your loans were paused, they were not frozen. Interest had been quietly piling up since August of 2025.
What happens if you ignore the 90‑day notice and let the servicer pick a plan for you?
So the balance you remember then, it grew. Log back in and take a look at the real number before. You decide anything. Okay, enough doom. Let's talk about options because here's a new one. It's called RAP, the repayment assistance plan. And if you take out any new federal loan going forward, it's basically the only income-driven option you've got. Your payment is a slice of your adjusted gross income: 1% if you are barely earning, up to 10% once you clear 100 grand, minus 50 bucks for every dependent. I should say. Honestly, wrap is a mixed bag. The bad news is no more zero dollar payments, and forgiveness now takes a full 30 years. But here is the upside: if your payment does not cover the interest that month, the government eats the difference.
Your balance does not grow. And if you're not chipping away at least $50 off your principal, they kick in the rest. So you're always moving. Forward for a lot of people, that is the first time that the math has been on their side. One big warning: the rollout has been a cuckoo crazy circus. Rap went live and studentaid.gov basically fell over. So picture this fall when everybody panics and goes into the same website all at once. My biggest piece of advice here is get ahead of the stampede today if you can. To do that, log into studentaid.gov and run Your numbers through the loan simulator. It's gonna show you what wrap, IBR, and standard each cost. While you're there, you'll also wanna decide if you want to give the department consent to pull your income from the IRS.
It does speed everything up and auto-recertifies you so your payment doesn't reset by surprise. But if you're not into sharing data, I obviously get that too. It is totally your call. And if you're going for loan forgiveness, do not Not get dumped into the new tiered standard plan. Payments there don't count toward forgiveness. Rap counts, IBR counts, so I would pick one of those. Then get on auto pay. It is basically free money. The department just quadrupled the auto pay discount from a quarter percent to a full percentage point. On a $30,000 balance, that's a few hundred bucks.
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