Federal student loan repayment plans to change in 2026

Starting July 1, 2026, federal student loan repayment structures will undergo significant changes. Existing plans, including Pay As You Earn (PAYE), Saving on a Valuable Education (SAVE), and Income-Contingent Repayment (ICR), are being replaced by two primary options: the Repayment Assistance Plan (RAP) and the Tiered Standard Plan.

The Repayment Assistance Plan (RAP) calculates payments based on the borrower's income, while the Tiered Standard Plan offers fixed and predictable payments.

Existing borrowers face specific deadlines for transitioning. Those currently on the SAVE plan will have 90 days from July 1, 2026, to select a new plan. Borrowers on PAYE or ICR have until July 1, 2028, to make a choice; failure to do so will result in an automatic move to the Tiered Standard Plan. For existing borrowers, Income-Based Repayment (IBR) remains available as the sole legacy income-driven option. However, any individual taking out new federal loans on or after July 1, 2026, will find RAP to be the only income-driven option available for all their combined loans.