Blog Post | June 29, 2026

Explainer: Student Loan Repayment Changes Starting July 1, 2026

Affordability Loan Repayment Student Debt

Author: Michele Zampini

Starting on July 1, 2026, the Education Department (ED) is rolling out major changes to the federal student loan repayment system.

Below, we outline the changes going into effect starting on July 1, 2026.  

Note: Borrowers with only loans taken out before July 1, 2026, will retain access to the current array of plans until July 1, 2028, with one caveat: the SAVE Plan. On March 10, 2026, a federal court issued an order preventing ED from implementing the SAVE Plan.

According to ED: “Starting on July 1, [2026], federal loan servicers will begin issuing notices to borrowers, instructing them to exit the … SAVE plan and enroll in a legal repayment plan within 90 days. Borrowers who do not transition plans within the 90-day period communicated by their servicer will be automatically enrolled into either the Standard repayment plan, or the new Tiered Standard plan that will be available beginning July 1. Servicers will notify borrowers of their specific 90-day deadline. … A borrower who wishes to transition before their loan servicer communicates a specific 90-day deadline may contact their servicer at any time to enroll in a lawful repayment plan.”

In addition, the 2025 reconciliation bill terminates the Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) Plans as of July 1, 2028.

New borrowers—those with any loans taken out on or after July 1, 2026—will only have access to the new plans listed below. 

Non-Income-Based Repayment Options for Student Borrowers 

Borrowers with only loans taken out before July 1, 2026, will retain access to the three existing non-income-based plans: the standard, graduated, and extended repayment plans. 

Borrowers with any loans taken out on or after July 1, 2026 will only have access to one non-income-based plan, the “new standard” plan. The new standard plan bases a borrower’s payment term on their principal loan balance. 

Income-Based Repayment Options for Student Borrowers 

For borrowers with only loans taken out before July 1, 2014: 

Starting on July 1, 2028, borrowers with only loans taken out before July 1, 2014, will have access to two income-based repayment plan options: the original Income-Based Repayment Plan (“Original IBR”) or the Repayment Assistance Plan (RAP). 

For borrowers with only loans taken out between July 1, 2014, and July 1, 2026: 

Starting on July 1, 2028, borrowers with only loans taken out before July 1, 2026, will have access to two income-based repayment plan options: an updated version of the 2014 Income-Based Repayment Plan (“2014 IBR” or “New IBR”) or the Repayment Assistance Plan (RAP). 

For borrowers with any loans taken out on or after July 1, 2026: 

Starting on July 1, 2028, borrowers with any loans taken out on or after July 1, 2026—even if they have loans from before that date—will only have access to one income-based repayment plan: the “Repayment Assistance Plan” (RAP). 

Income-Based Repayment Options for Parent Borrowers 

Parent PLUS borrowers have fewer options than student borrowers.  

Parent PLUS borrowers with existing loans will be able to access whichever of the above Income-Based Repayment (IBR) Plans corresponds with their borrowing date, but only if they consolidate their loans into a Direct Consolidation Loan before July 1, 2026, and then enroll in an income-based repayment plan before July 1, 2028.  

Parent PLUS borrowers who take out new loans on or after July 1, 2026, or who do not consolidate their loans before that date, will not have access to any income-based plans after July 1, 2026. 

The below chart outlines the terms of each of these income-based plan options. 

Design DetailRepayment Assistance Plan (RAP)2014 IBR ("New" IBR)Original IBR
Income/Debt Requirement for EntryNoneNoneNone
EligibilityDirect Loan student borrowers (FFEL and Perkins borrowers may consolidate to DL to participate); Parent PLUS not eligibleDirect Loan and FFEL student borrowers whose loans originated between July 1, 2014 and July 1, 2026; Parent PLUS eligible if consolidated by July 1, 2026 and enrolled in an income-based plan by July 1, 2028Direct Loan and FFEL student borrowers whose loans originated before July 1, 2014; Parent PLUS eligible if consolidated before July 1, 2026 and enrolled in an income-based plan by July 1, 2028
Monthly Payment FormulaCalculates a borrower's total annual payment based on a percentage of their total adjusted gross income (AGI), ranging from 1-10%, then divides the total annual payment by 12 to calculate the monthly payment, then reduces that amount by $50 per month per dependent child, with a minimum payment of $10 per month for all borrowers10% of a borrower's discretionary income, defined as their AGI above 150% of the federal poverty level (FPL), up to the fixed 10-year payment amount15% of a borrower's discretionary income, defined as their AGI above 150% of the federal poverty level (FPL), up to the fixed 10-year payment amount
Minimum Payment Required?Yes, $10/monthNoneNone
Maximum Repayment Period30 years/360 payments; any remaining balance discharged after 360 payments20 years/240 payments; any remaining balance discharged after 240 payments25 years/300 payments; any remaining balance discharged after 300 payments
Treatment of Interest Accrual While Enrolled in IDRWaives all monthly unpaid accrued interest for the full repayment term (interest that is not fully covered by a borrower’s monthly income-based payment)Subsidized loans: Waives all monthly unpaid accrued interest for up to 3 years
Unsubsidized loans: No interest subsidy		Subsidized loans: Waives all monthly unpaid accrued interest for up to 3 years
Unsubsidized loans: No interest subsidy
Principal Pay-Down?For borrowers whose monthly payment reduces their principal balance by less than $50, RAP provides a matching principal payment to ensure the borrower's payment goes down by at least $50 per monthNoneNone
Standard Payment Cap?NoYes (a borrower's monthly payment is capped at what their payment would be under the 10-year standard repayment plan)Yes (a borrower's monthly payment is capped at what their payment would be under the 10-year standard repayment plan)
Treatment of Married BorrowersAllows borrowers whose tax status is married filing separately to exclude their spouse from both the borrower’s household income and family sizeAllows borrowers whose tax status is married filing separately to exclude their spouse from both the borrower’s household income and family sizeAllows borrowers whose tax status is married filing separately to exclude their spouse from both the borrower’s household income and family size
Is Discharged Debt Taxed?Yes, as of January 1, 2026Yes, as of January 1, 2026Yes, as of January 1, 2026