Federal student loan repayment changed substantially in 2026, so anything you read from a few years ago may no longer apply.
What changed. The One Big Beautiful Bill Act, signed in July 2025, replaced several long-standing repayment plans. The SAVE plan has ended. Two new plans took effect July 1, 2026: the Repayment Assistance Plan (RAP) and a Tiered Standard Plan.
If you were in SAVE, this is urgent. Servicers began sending exit notices in July 2026 and are continuing to roll them out. You get 90 days from the date of your notice to pick a new plan. If you do not choose within that window, you will be moved automatically into the Standard or Tiered Standard Plan, which generally carries higher payments than an income-driven plan. Do not let the window close by default.
If you have loans disbursed on or after July 1, 2026. RAP is generally your only income-driven option, and the Tiered Standard Plan is the default if you do not actively choose. Under Tiered Standard, your payment and repayment period are based on how much you owe rather than what you earn, running 10, 15, 20, or 25 years depending on balance size, with a $50 minimum. Note that Tiered Standard payments do not count toward Public Service Loan Forgiveness.
How RAP works. Your monthly payment is a percentage of your adjusted gross income from the prior year on a sliding scale, capped at 10 percent of AGI. Borrowers earning $10,000 or less pay a flat $120 per year, or $10 per month. Your payment is reduced by $50 for each eligible dependent, down to that $10 floor. Remaining balances are forgiven after 30 years of qualifying payments. RAP requires federal Direct Loans; Parent PLUS loans and consolidated loans including a Parent PLUS loan are generally not eligible.
If you have older loans and take out no new ones. You can generally remain in a legacy plan such as Income-Based Repayment. But taking out any new loan, including a consolidation, on or after July 1, 2026 moves all your Direct Loans to the new rules.
What to do today. Log into studentaid.gov, confirm which plan you are in, identify your servicer, and use the loan simulator to compare payments. Never pay a company to manage or consolidate your federal loans; everything they offer is free at studentaid.gov.
Sources: Congressional Research Service, “The Repayment Assistance Plan (RAP) in P.L. 119-21,” congress.gov/crs-product/IF13075; Federal Student Aid, studentaid.gov; National Consumer Law Center Student Loan Borrower Assistance, studentloanborrowerassistance.org; NYC Department of Consumer and Worker Protection summary of 2026 changes, nyc.gov. This area is actively changing; verify against studentaid.gov