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Student Loan Payment Plan Changes: Your Complete Guide 2026

Category: BlogStudent Debt

Student Loan Changes: Your Complete Guide

How recent legislation affects your repayment journey and what you need to do

Who Should Use This Guide

This guide is for you if:

  • You currently have federal student loans in any repayment plan
  • You're considering Public Service Loan Forgiveness (PSLF)
  • You have Parent PLUS loans
  • You're in SAVE forbearance and wondering what's next
  • You want to understand how recent legislation affects your loans

This guide is NOT for:

  • Private student loans (these changes don't affect private loans)
  • Loans that are fully paid off
  • People who only have federal loans in default (different rules apply)

Why These Changes Are Happening

In July 2025, Congress passed legislation that fundamentally reshapes federal student loan repayment.

The result: Most current income-driven repayment plans will be eliminated, forcing millions of borrowers to transition to new options by 2028. While this may simplify the system, it also creates uncertainty for current borrowers who need to plan their transition carefully.

Why act now: The window for making optimal choices is limited. After July 1, 2026, your flexibility decreases significantly, and by 2028, you'll be required to choose from only two income-driven options.

Critical Notices: Nothing in this bill impacts current rules around Public Service Loan Forgiveness or PSLF Buy Back at this time. Financial decisions should always be made based on your own personal financial situation and goals. This guide should not be used as definitive advice for all borrowers - take your own financial situation into account.

Find Your Current Situation

Click on your current repayment plan to see what changes for you:

PAYE, ICR

Eliminated in 2028
▶

What's Happening

  • Plan eliminated July 1, 2028
  • You can stay in your current plan until July 1, 2028
  • Must choose by July 1, 2028: RAP (available July 1, 2026), IBR, or Standard
  • Auto-enrollment if you don't choose by July 1, 2028
  • All past payments count toward PSLF

Your Next Step

Start planning your transition by deciding if you want to stay in PAYE/ICR until July 1, 2028 or switch to another plan earlier. Calculate your payments under IBR now and RAP (starting July 1, 2026) to identify which plan works best for you. Continue to certify your income annually to maintain your current plan. Make your final plan selection by July 1, 2028.
Urgency: Medium

IBR (Income-Based Repayment)

Continues with Modifications
▶

What's Happening

  • Plan continues with modifications
  • No more "partial financial hardship" requirement
  • 15% of income above 150% poverty line for borrowers who borrowed before July 1, 2014
  • 10% of income above 150% poverty line for borrowers who borrowed only after July 1, 2014

Your Next Step

Calculate your payments under RAP (starting July 1, 2026) to compare with your current IBR payments. Decide if you want to switch to RAP after July 1, 2026 or stay with IBR. Continue to certify your income annually to maintain your current plan. You can switch between IBR and RAP anytime after July 1, 2026.
Urgency: Low

SAVE Forbearance

Action Required Soon
▶

What's Happening

  • Forbearance time doesn't count for PSLF or IDR forgiveness
  • You can explore buy back as an option to recoup this forbearance time at the end of 120 payments
  • By July 1, 2026, all borrowers given a 90 day window to switch
  • If you don't switch voluntarily, you will be placed into a standard plan

Your Next Step

Plan to switch within 90 days of notification from your servicer. Calculate your payments under IBR now and RAP (starting July 1, 2026) to identify which plan works best for you, and potential buyback amounts for forbearance time. Consider switching to IBR or another IDR plan depending on your eligibility to start earning PSLF/IDR forgiveness credit.
Urgency: High

Parent PLUS Loans

Severely Restricted Starting 2026
▶

What's Happening

  • Severely restricted starting July 1, 2026
  • No RAP (available July 1, 2026) or IDR access without consolidation before July 1, 2026 AND entering an IDR before July 1, 2028
  • Parent PLUS loans taken after July 1, 2026 cannot access income-driven plans OR forgiveness options as a result
  • Must enter IDR before July 1, 2028 to retain access
  • Standard repayment only otherwise
  • If you consolidated once: Must be on IDR before July 1, 2028 to stay
  • If you double consolidated by June 30, 2025: Should retain IDR access

Your Next Step

Review consolidation options immediately if you want access to income-driven repayment. Complete any necessary consolidation before July 1, 2026. Enter your chosen IDR plan before July 1, 2028 to maintain access. Budget for potentially higher payments starting July 1, 2026 if you don't consolidate. Avoid taking new Parent PLUS loans after July 1, 2026 if possible.
Urgency: Critical

Not in an IDR Plan (Standard, Graduated, or Extended)

Consider Your Options
▶

What's Happening

  • You can stay in your current non-IDR plan indefinitely
  • Your current payments do NOT count toward PSLF or IDR forgiveness credits
  • You have access to IBR, PAYE, and ICR now if you enroll, RAP starting July 1, 2026
  • After July 1, 2026, new borrowers will only have Standard or RAP options
  • You won't be forced to switch like current IDR borrowers

Your Next Step

Evaluate whether IBR, PAYE, or ICR (available now) or RAP (starting July 1, 2026) could lower your monthly payments and provide forgiveness benefits. Calculate payments under these options to compare with your current plan. If pursuing PSLF, switch to an eligible plan immediately to start earning credit. Continue making payments on your current plan if it works for your budget and payoff timeline.
Urgency: Low to Medium (depending on your financial situation and forgiveness goals)

Your New Options: IBR vs RAP

Income-Based Repayment (IBR)

PSLF-eligible

The familiar option that continues

  • Pre-2014 borrowers: 15% of discretionary income
  • Post-2014 borrowers: 10% of discretionary income
  • Potential $0 payments
  • 20-25 year IDR forgiveness
  • Married filing separately option

Example: $50k income, family of 3 = $105.92/month

Repayment Assistance Plan (RAP)

PSLF-eligible

The new sliding scale option (available July 1, 2026)

  • 1-10% based on income brackets
  • $50/month credit per dependent
  • Interest forgiveness each month
  • Government adds up to $50 toward principal
  • 30-year IDR forgiveness
  • Married filing separately option

Example: $50k income, 2 kids = $66.67/month

Your Action Timeline

1

Before July 1, 2026

Complete any necessary consolidation by this date. Make your plan for switching from SAVE forbearance.

2

July 1, 2026 - July 1, 2028

New borrowers limited to Standard or RAP only

3

By July 1, 2028

All borrowers seeking IDR must choose IBR or RAP

Bottom Line

You have time to plan, but the window for optimal choices is narrowing. Calculate your payments under all available plans through 2028 (IBR, PAYE, ICR, and RAP starting July 1, 2026), then calculate for IBR and RAP to know what to choose by July 1, 2028. Make your move before July 1, 2026. After that date, your flexibility decreases significantly.