Published 2026-08-23
Federal Student Loan Repayment Plans After the 2026 Overhaul
The One Big Beautiful Bill Act rewrote this area, and 1 July 2026 is the date everything hinges on. Which plans you can use now depends on when your loans were disbursed — and for new borrowers the menu is much shorter than it was.
Key takeaways
- Loans first disbursed on or after 1 July 2026 have exactly one income-driven option: the Repayment Assistance Plan.
- Take a new loan on or after that date and you lose access to IBR, ICR and PAYE, including on your older loans.
- Without a choice, borrowers with loans disbursed from 1 July 2026 are placed on the Tiered Standard Plan.
- This is the fastest-moving area on this site. Confirm anything here against StudentAid.gov before acting on it.
The short answer
There are two families. Fixed-payment plans set the payment from what you owe, your rate and a fixed term. Income-driven plans set it from your income and family size, and forgive whatever is left after a qualifying number of payments.
The 2026 reform did two things: it created a new income-driven plan, the Repayment Assistance Plan, and it began closing the older ones. The cut-off date is 1 July 2026 and it is applied to the disbursement date of the loan, not to when you enrolled or graduated.
Because the rules are still being implemented, treat this guide as orientation and StudentAid.gov as the authority. We date every claim here for exactly that reason.
Which side of 1 July 2026 you are on
This is the question that determines everything else, and the answer is about disbursement dates rather than about you.
| Your situation | Income-driven plans available |
|---|---|
| All loans disbursed before 1 July 2026, no new loans since | IBR, ICR and PAYE remain available, and RAP as well |
| Any loan first disbursed on or after 1 July 2026 | RAP only — taking a new loan closes IBR, ICR and PAYE for you |
| A new consolidation loan taken on or after 1 July 2026 | Counts as a new loan for this purpose |
| No plan chosen, loan disbursed from 1 July 2026 | Your servicer places you on the Tiered Standard Plan |
The fixed-payment plans
These base the payment on the debt rather than on your income. They cost less in total interest than an income-driven plan for anyone who can afford them.
- Standard: a fixed amount that clears the loans within ten years, or ten to thirty for a consolidation loan.
- Tiered Standard: for Direct Loans disbursed on or after 1 July 2026, with a term of ten to twenty-five years depending on how much was borrowed. This is the automatic default when you leave school.
- Graduated: payments start lower and rise, typically every two years.
- Extended: a longer term for borrowers with a large enough balance, which lowers the payment and raises total interest.
The income-driven plans
These set the payment from your income and family size, and require you to recertify annually — even in a year when nothing changed. Consenting to the automatic disclosure of your federal tax information makes that recertification happen without you.
- Repayment Assistance Plan: the payment is a percentage of your annual income, commonly your adjusted gross income, divided by twelve, adjusted for dependants and filing status. It is the only IDR plan for loans disbursed on or after 1 July 2026.
- Income-Based Repayment: 10% or 15% of discretionary income depending on when you first borrowed, and never more than the ten-year Standard payment. Closed to anyone taking a new loan from 1 July 2026.
- Income-Contingent Repayment and Pay As You Earn: still available to eligible existing borrowers, and both are eliminated in the future under the same Act.
Forgiveness, and the paperwork it depends on
Both routes to forgiveness count payments rather than years, and both require the payments to have been made under a qualifying plan.
Public Service Loan Forgiveness discharges the remaining balance on Direct Loans after the equivalent of 120 qualifying monthly payments — ten years — made under an income-driven plan while working full time for an eligible employer. The employer test is the part people get wrong, and it is worth certifying employment annually rather than discovering a gap at year ten.
Income-driven forgiveness discharges the balance after a set number of qualifying months under the plan. The count is specific to the plan you are on, and switching plans does not always carry the whole count across.
What to do now
A short sequence that applies whichever side of the date you are on.
- Find out exactly what you hold. Log into StudentAid.gov and list each loan with its type and its first disbursement date.
- Run the Loan Simulator before choosing. The difference between plans over a full term is frequently five figures.
- If you work for a qualifying employer, certify that employment now and every year, rather than reconstructing it later.
- Set up automatic recertification by consenting to the tax information disclosure. A missed recertification can push your payment up to the Standard amount.
- Think hard before taking any new federal loan on or after 1 July 2026 if you hold older loans — including a consolidation loan, which counts.
Frequently asked questions
What happens if I do not choose a plan?
For loans disbursed on or after 1 July 2026 the servicer places you on the Tiered Standard Plan, a ten-to-twenty-five-year fixed-payment plan. Federal Student Aid warns that this may mean a higher monthly payment than you would otherwise have.
Does consolidating my loans change which plans I can use?
It can, and this is the trap in the new rules. A consolidation loan disbursed on or after 1 July 2026 is a new loan, which closes IBR, ICR and PAYE. Check the consequences before consolidating.
Do I have to recertify even if my income has not changed?
Yes. Recertification is annual on every income-driven plan regardless of whether anything changed. Agreeing to the automatic disclosure of your federal tax information makes it happen without action from you.
How current is this?
Written and verified against StudentAid.gov on 23 August 2026. This area changes by statute and by regulation more often than anything else we cover, so confirm the detail at the source before you act.
Run the numbers
This guide explains the concept. These put your own figures on it.
- Student Loan RAP CalculatorEstimate your monthly payment under the new Repayment Assistance Plan (RAP), and compare it to a standard 10-year repayment.
- Extra Payment CalculatorSee how much you save by paying extra toward your loan principal, and whether to shorten your term or lower your payment.
- 50/30/20 Budget CalculatorSplit your income into needs, wants, and savings using the 50/30/20 rule.
Free and no sign-up, on financeinyourpocket.com — our sister site.
Terms used in this guide
- Student eligibility
- Whether the bank offers an account designed for students, usually with the monthly fee waived while you are enrolled and an age limit.
- Interest rate
- The yearly rate used to calculate the interest portion of your mortgage payment. On its own it tells you what the loan costs to borrow, not what it costs to get.
- Loan type
- Which program the mortgage runs through: conventional, FHA, VA or jumbo. The program sets the credit and down-payment floor, the insurance you have to carry, and the size of loan allowed.
Sources
- Federal Student Aid, U.S. Department of Education — Federal student loan repayment plans
- Federal Student Aid, U.S. Department of Education — Income-driven repayment plans
- U.S. Department of Education — Fact sheet — simplifying student loan repayment
The content provided on this site is for educational and informational purposes only and does not constitute financial, legal, or tax advice.