Federal student loan repayment changed more in 2025–2026 than in the prior decade combined. The SAVE plan has been eliminated following a court ruling and a December 2025 settlement. Starting July 1, 2026, two new repayment plans — the Repayment Assistance Plan (RAP) and the Tiered Standard Plan — become the only options for any loan disbursed on or after that date. If you currently have federal loans, your options depend entirely on when your loans were first disbursed.
This is a genuinely confusing moment to be a student loan borrower, and it's not your fault if you've lost track of what's happening. Between a Biden-era plan getting struck down in court, a major new law (the One Big Beautiful Bill Act, signed July 2025), and a hard deadline of July 1, 2026 for implementation, there's a lot moving at once. This guide cuts through it.
The timeline: how we got here
Which rules apply to you?
This is the most important distinction in the entire system right now: your available repayment plans depend on when your loan was first disbursed, not when you graduated or when you're reading this.
If all of your federal loans were disbursed before July 1, 2026: you keep access to the existing Standard, Graduated, and Extended plans, plus Income-Based Repayment (IBR) — and you can also voluntarily opt into the new RAP plan if it benefits you.
If you take out any new federal loan on or after July 1, 2026 — even if you already have older loans — all of your federal loans must be repaid under either RAP or the new Tiered Standard Plan. The Graduated and Extended plans are no longer available to you.
The two new plans, starting today
Repayment Assistance Plan (RAP)
New · Income-drivenThe new default income-driven plan, replacing SAVE, PAYE, and ICR for new borrowers. Monthly payments are set as a percentage of your adjusted gross income — between 1% and 10%, scaling with how much you earn — with a minimum payment of $10/month if your income is under $10,000/year.
Tiered Standard Plan
New · Fixed paymentA fixed, non-income-driven plan where your repayment term — 10, 15, 20, or 25 years — is determined by your total outstanding loan balance rather than your income. No forgiveness timeline (aside from PSLF where applicable), but lower total interest than RAP for borrowers who can afford the higher payments.
What survives, what's sunsetting, what's already gone
Income-Based Repayment (IBR)
Legacy · Stays permanentlyThe only legacy income-driven plan that remains permanently available for borrowers with loans disbursed before July 1, 2026. Payments are 10% or 15% of discretionary income depending on when your first loan was disbursed, capped at the 10-year Standard payment amount.
Standard, Graduated, Extended Plans
Legacy · Loans before Jul 2026 onlyThese existing fixed-payment plans remain available, but only for borrowers whose loans were entirely disbursed before July 1, 2026. The Extended plan requires more than $30,000 in outstanding Direct Loans.
SAVE Plan
EliminatedVacated by federal court order and ended through a December 2025 settlement. No new enrollments are being accepted. The roughly 7 million remaining SAVE borrowers are being transitioned to other plans, with servicers sending notices starting July 1, 2026 and a 90-day window to choose.
PAYE & ICR
Sunsetting by Jul 2028Pay As You Earn and Income-Contingent Repayment close to new enrollees on July 1, 2026, and will be fully phased out by July 1, 2028. Borrowers still enrolled at that point will be automatically transitioned to RAP or IBR.
If you're currently on the SAVE plan: what to do right now
If you're one of the roughly 7 million borrowers still on SAVE, you should expect a notice from your loan servicer starting July 1, 2026, beginning a 90-day window to actively choose a new plan. If you take no action within that window, you will be automatically enrolled in either the existing Standard Repayment Plan or the new Tiered Standard Plan — which is very likely to mean a higher monthly payment than what you were paying on SAVE.
📋 If you're on SAVE, do this now
Tax warning: The tax exemption on forgiven student loan debt expired at the end of 2025. Borrowers who receive loan forgiveness through an income-driven repayment plan in 2026 or later may owe federal income tax on the forgiven amount. This does not apply to Public Service Loan Forgiveness, which remains tax-free.
How to choose between RAP and a fixed plan
If you have access to both income-driven and fixed-payment options, the right choice depends on your income relative to your debt:
- Choose an income-driven plan (RAP or IBR) if your monthly payment under a fixed plan would consume more than roughly 10–15% of your gross income, or if you're pursuing Public Service Loan Forgiveness
- Choose a fixed plan (Standard or Tiered Standard) if you can comfortably afford the higher payment — you'll pay significantly less interest over the life of the loan and pay it off faster
- Run both scenarios through the official Loan Simulator before deciding — the difference in total cost over the life of the loan can be tens of thousands of dollars
RAP and similar income-driven plans lower your monthly payment but almost always increase the total amount you pay over the life of the loan, due to the extended timeline and accruing interest. They make sense as an affordability tool, not a way to reduce total cost — unless you're specifically pursuing forgiveness.
Why this matters before you even borrow
If you're still deciding which college to attend, these repayment changes are a strong argument for minimizing how much you borrow in the first place. The new Tiered Standard Plan's longer terms for larger balances, and RAP's 30-year forgiveness timeline versus the small dollar amount of debt many borrowers will end up repaying for decades, both point in the same direction: the most reliable way to keep your options good is to borrow less to begin with.
See what your loan payment will actually look like
Before you commit to a school, see your real monthly payment and how it compares to your expected starting salary.