Student Loan Repayment Changed on July 1, 2026. Here's What You Need to Know.

If you have federal student loans, the rules changed on July 1, 2026 — and depending on your situation, you may have a limited window to make a decision.

This is a genuinely confusing moment, partly because the changes rolled out alongside a lot of headlines and partly because which rules apply to you depends on when you borrowed. So let's lay it out plainly: what changed, which plans exist now, and what you should actually do.

The short version

• The SAVE plan is gone. It's no longer an available repayment option.
• Two new plans launched on July 1, 2026: the Repayment Assistance Plan (RAP) and the Tiered Standard Plan.
• If you were enrolled in SAVE, your servicer began sending notices on July 1. You have 90 days to pick a new plan.
• If you don't choose within that window, you'll be automatically placed into the Standard or Tiered Standard Plan — which generally means a higher monthly payment than an income-driven plan.
• PAYE and ICR stopped accepting new borrowers on July 1, 2026, and sunset entirely by July 2028.
• IBR survives. It's the only legacy income-driven plan that remains available long-term.

What is RAP (the Repayment Assistance Plan)?

RAP is the new income-driven repayment plan. Like other IDR plans, it sets your monthly payment based on what you earn rather than what you owe.

The key details:

• Payments are set at 1% to 10% of your adjusted gross income, scaling with what you earn
• If your income is under $10,000/year, there's a flat $10/month minimum payment
• Any remaining balance is forgiven after 30 years of repayment
• All Direct Loans taken out for your own education are eligible
• Parent PLUS loans are not eligible for RAP

One important note: RAP does not cap your payment the way IBR does. Under IBR, your payment never exceeds what you'd pay on the 10-year Standard plan, no matter how high your income goes. RAP has no such cap — so at higher incomes, a RAP payment can actually exceed the Standard plan amount. If you're a higher earner with a moderate balance, IBR may produce a lower payment.

What is the Tiered Standard Plan?

This is the other new option, and it's important to understand what it is not: it's not income-driven. There's no forgiveness timeline, no annual income recertification, and your payment isn't tied to what you earn.

Instead, it's a fixed-payment plan where the repayment timeline is set based on your total debt. Larger balances get longer timelines. It's simpler and more predictable, but it offers no relief if your income drops.

Which plans can you actually choose?

This is where the timing of your loans matters:

What about Parent PLUS loans?

Parent PLUS borrowers have the narrowest set of options, and there was a hard deadline. To access income-driven repayment at all, Parent PLUS borrowers needed to consolidate into a Direct Consolidation Loan before July 1, 2026, and then enroll in an income-driven plan before July 1, 2028. Parent PLUS loans taken out on or after July 1, 2026 have no access to income-driven plans.

If you're a Parent PLUS borrower and you're unsure where you stand, this is worth a call to your servicer specifically — the rules here are less forgiving than they are for student borrowers.

What about PSLF?

Public Service Loan Forgiveness is still available on income-driven plans after 120 qualifying payments while working full-time for a qualifying employer. PSLF forgiveness remains tax-free. Non-PSLF forgiveness through an IDR plan is treated as taxable income under current law — worth planning for if you're on a 20-, 25-, or 30-year forgiveness track.

What to actually do this week

1. Log into StudentAid.gov and confirm which repayment plan you're currently in. A lot of people genuinely don't know.
2. If you're in SAVE, note your 90-day deadline and don't let it pass by default.
3. Compare your options. Run the numbers on RAP vs. IBR vs. the Standard plans for your specific income and balance. The Federal Student Aid Loan Simulator is one tool; some borrowers have reported accuracy issues during the transition, so it's worth cross-checking with your servicer.
4. Apply at StudentAid.gov/idr. The application takes roughly 10 minutes and pulls your income either through the IRS Data Retrieval Tool or via uploaded pay stubs.
5. Apply early if you can. Processing backlogs are likely during the transition window, and waiting until the last week increases the risk of a gap.

A note on the bigger picture

Whatever plan you land in, your student loan payment is a fixed monthly cost that belongs in the "needs" column of your budget. If your payment is changing — and for a lot of former SAVE borrowers it will go up — that's worth rebuilding your budget around rather than absorbing month to month and hoping it works out. Our guide to adapting the 50/30/20 rule covers what to do when a fixed cost takes up more of your income than the standard formula assumes.

These rules are still being implemented, and details may be clarified further by the Department of Education. Check StudentAid.gov for the current official guidance on your specific situation.