Federal student loan repayment options changed a lot in 2026. As of October 2026, a new income-driven plan called the Repayment Assistance Plan (RAP) and a new Tiered Standard Plan are available. The SAVE plan has ended, and two older income-driven plans are set to close in 2028. Which options you can use now depends mainly on when your loans were made and what type of loans you have.
This overview explains each plan in plain language, shows who can use it, and walks through a hypothetical RAP payment calculation. Rules in this area have shifted quickly and may change again, so always confirm details with your loan servicer and the Department of Education’s tools on StudentAid.gov before switching plans.
What Changed in 2026
The changes come from a federal law signed in July 2025, often referred to as the One Big Beautiful Bill Act, plus court action on the SAVE plan. Here are the key dates reported by the Department of Education, federal loan servicers and public agencies:
- March 10, 2026: A court order ended the SAVE plan, according to the federal servicer Edfinancial.
- July 1, 2026: RAP and the Tiered Standard Plan became available. Loans made on or after this date, including new consolidation loans, can only use RAP or the Tiered Standard Plan.
- July 1 through mid-August 2026: Servicers began notifying SAVE borrowers, who have 90 days from their notice to choose a new plan.
- July 1, 2028: The ICR and PAYE plans are scheduled to end, and borrowers in those plans must switch by then.
Plans Available as of October 2026
| Plan | Payment basis | Term / forgiveness | Who can use it |
|---|---|---|---|
| Repayment Assistance Plan (RAP) | 1% to 10% of adjusted gross income, minus $50 per dependent, $10 minimum | Remaining balance forgiven after 360 qualifying payments (30 years) | Eligible Direct Loan borrowers; not Parent PLUS loans or consolidations that include them |
| Tiered Standard | Fixed payment | 10 to 25 years based on balance | Loans made on or after July 1, 2026; default plan for some borrowers who do not choose |
| Income-Based Repayment (IBR) | 10% or 15% of discretionary income | Forgiveness after 20 or 25 years | Borrowers with loans made before July 1, 2026 |
| ICR and PAYE | Income-driven | Plans end July 1, 2028 | Existing eligible borrowers with only older loans |
| Standard, Graduated, Extended (original) | Fixed or rising payments | Generally 10 years; Extended up to 25 years | Borrowers with only loans made before July 1, 2026 |
The Repayment Assistance Plan (RAP)
RAP is the new income-driven option. Your monthly payment is based on your adjusted gross income (AGI). According to Edfinancial’s RAP guidance, AGI of $10,000 or less carries a base payment of $120 a year. Above that, the percentage rises by one point for each $10,000 band: 1% for AGI from $10,001 to $20,000, 2% for the next band, and so on up to 10% for AGI above $100,000. The yearly amount is divided by 12, then reduced by $50 for each dependent. The monthly payment cannot fall below $10.
RAP includes two features designed to keep balances from growing:
- Interest subsidy: If your full, on-time payment does not cover the month’s interest, the unpaid interest is waived.
- Principal match: If a full, on-time payment reduces principal by less than $50, the Department adds a matching principal payment of up to $50.
Any remaining balance can be forgiven after 360 qualifying payments, which is 30 years. Edfinancial notes that forgiven amounts may be treated as taxable income. RAP also counts toward Public Service Loan Forgiveness (PSLF) for eligible public service workers.
Hypothetical RAP example
Imagine a single borrower with an AGI of $45,000. That income falls in the $40,001 to $50,000 band, which uses 4%. Four percent of $45,000 is $1,800 a year, or $150 a month. If the same borrower claimed one dependent, the payment would drop by $50 to $100 a month. With AGI of $72,000 and two dependents, the rate would be 7%, producing $5,040 a year or $420 a month, minus $100, for a payment of $320. These figures are illustrations only; use the official Loan Simulator for your own numbers.
The Tiered Standard Plan
The Tiered Standard Plan uses fixed monthly payments, with the repayment period tied to how much you owe. As reported by NPR in June 2026, the terms are:
- Less than $25,000: 10 years
- $25,000 to $49,999: 15 years
- $50,000 to $99,999: 20 years
- $100,000 or more: 25 years
The Department of Education’s fact sheet gives an example of a $30,000 loan whose minimum payment drops from $341 a month on a 10-year schedule to $262 a month on a 15-year schedule. A longer term lowers the monthly payment but generally increases the total interest paid. New York City’s Department of Consumer and Worker Protection notes that the Tiered Standard Plan generally has higher payments than income-driven plans.
Income-Based Repayment (IBR) and Other Older Plans
IBR remains available to borrowers whose loans were made before July 1, 2026. Under IBR, payments are 15% of discretionary income with forgiveness after 25 years for borrowers whose loans predate July 1, 2014, or 10% with forgiveness after 20 years for newer borrowers, according to NPR’s summary. After the ICR and PAYE plans close in July 2028, IBR is expected to be the only older income-driven plan left for these borrowers.
Borrowers who have only loans made before July 1, 2026, can also still use the original Standard, Graduated and Extended plans. Taking out a new loan or consolidating on or after July 1, 2026, however, generally limits that new loan to RAP or the Tiered Standard Plan.
What SAVE Borrowers Should Know
The SAVE plan is no longer available. According to NASFAA, the Department said borrowers who do not choose a new plan within their 90-day window will be placed in either the Standard Plan or the Tiered Standard Plan. Because those fixed-payment plans can cost much more per month than an income-driven plan, it is worth reviewing your options before your deadline. Borrowers pursuing PSLF need to be in a qualifying plan, such as RAP or IBR, for payments to count.
NASFAA also reported a large backlog of pending income-driven repayment applications earlier in 2026, so applying early and keeping copies of confirmation notices is a sensible precaution.
Parent PLUS Loans
Parent PLUS loans follow different rules. Parent PLUS loans made on or after July 1, 2026, can use only the Tiered Standard Plan, according to NPR. Parent PLUS loans, and consolidation loans that include them, are not eligible for RAP. Parents with older Parent PLUS loans should talk to their servicer about what remains available before making changes, since consolidating now can affect eligibility.
How to Choose and Apply
- Find your loan details. Log in to your StudentAid.gov account to see your loan types, dates and servicer.
- Run the Loan Simulator. The Department’s simulator compares estimated payments and total cost under each plan you qualify for.
- Weigh monthly payment against total cost. Lower payments today can mean more interest or a longer repayment period.
- Consider forgiveness goals. If you are pursuing PSLF, choose a qualifying plan.
- Apply online. RAP applications are available on StudentAid.gov. Consenting to share IRS income data can speed up the process.
- Keep paying on time. Missed federal loan payments can lead to delinquency and default. Our guide on what happens if you miss a loan payment outlines the general consequences.
Edfinancial also notes that the autopay interest rate reduction rose from 0.25% to 1% starting July 1, 2026, through June 30, 2028, for borrowers enrolled by the stated deadline. Ask your servicer how this applies to your account.
Frequently Asked Questions
Can I still enroll in SAVE?
No. The SAVE plan ended in 2026, and borrowers who were in it are being moved to other plans. If you were enrolled, watch for your servicer’s notice and its specific deadline.
Is RAP better than IBR?
It depends on your income, family size, balance and goals. RAP has a 30-year forgiveness timeline and payments tied to AGI, while IBR uses discretionary income with a 20- or 25-year timeline. New York City’s consumer protection agency cautions that RAP may be the most expensive income-driven plan for many borrowers, so compare both in the Loan Simulator if you qualify for each.
Does consolidating my loans change my options?
Yes. A consolidation loan made on or after July 1, 2026, is treated as a new loan, so it can only use RAP or the Tiered Standard Plan. Consolidation can also affect Parent PLUS eligibility and progress toward forgiveness.
Do these changes affect private student loans?
No. These plans apply to federal student loans. Private loans follow the terms of your contract with the lender. For background on an older federal program, see our article on Perkins loans.
Bottom Line
As of October 2026, federal student loan repayment options center on RAP, the Tiered Standard Plan and, for older loans, IBR, with ICR and PAYE winding down by July 2028. The right plan depends on your loan dates, loan types, income and forgiveness goals. Check your account on StudentAid.gov, compare plans in the Loan Simulator, and contact your servicer before your deadlines. If you are also weighing other borrowing, our explainer on how student loans count as debt for a HELOC may help.
Sources
- U.S. Department of Education – Fact Sheet: Simplifying Student Loan Repayment
- Edfinancial (Federal Student Aid servicer) – Repayment Assistance Plan
- NYC Department of Consumer and Worker Protection – Key Changes in Federal Student Loan Repayment
- NASFAA – ED Begins Campaign to Move Borrowers Enrolled in SAVE to Other Repayment Plans
- NPR via Michigan Public – July 1 brings big student loan changes
- Illinois Attorney General – Repayment Assistance Plan fact sheet
This article is for general information only and is not financial advice. See our Disclaimer.
