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In July 2025, President Trump signed into law a massive legislative package that makes major changes to federal higher education policy. The law restructures the federal student loan repayment system. In the coming months, the Education Department will undertake a regulatory process to more clearly define how these changes will be implemented.
Below, we outline the changes going into effect starting on July 1, 2026.
Note: Borrowers with only loans taken out before July 1, 2026, will retain access to the current array of plans until July 1, 2028, with one caveat: the Education Department stopped allowing borrowers to enroll in the SAVE Plan in February 2025. Borrowers who had already enrolled in the SAVE Plan were placed in forbearance starting in 2024. For borrowers in the SAVE Plan, the Education Department has not clarified what will happen if the plan is struck down by court order before July 1, 2028. Regardless of how SAVE Plan litigation resolves, the reconciliation bill terminates the SAVE Plan—along with the Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) Plans—as of July 1, 2028.
New borrowers—those with any loans taken out on or after July 1, 2026—will only have access to the new plans listed below.
Non-Income-Based Repayment Options for Student Borrowers
Borrowers with only loans taken out before July 1, 2026, will retain access to the three existing non-income-based plans: the standard, graduated, and extended repayment plans.
Borrowers with any loans taken out on or after July 1, 2026 will only have access to one non-income-based plan, the “new standard” plan. The new standard plan bases a borrower’s payment term on their principal loan balance.
Income-Based Repayment Options for Student Borrowers
For borrowers with only loans taken out before July 1, 2014:
Starting on July 1, 2028, borrowers with only loans taken out before July 1, 2014, will have access to two income-based repayment plan options: the original Income-Based Repayment Plan (“Original IBR”) or the Repayment Assistance Plan (RAP).
For borrowers with only loans taken out between July 1, 2014, and July 1, 2026:
Starting on July 1, 2028, borrowers with only loans taken out before July 1, 2026, will have access to two income-based repayment plan options: an updated version of the 2014 Income-Based Repayment Plan (“2014 IBR” or “New IBR”) or the Repayment Assistance Plan (RAP).
For borrowers with any loans taken out on or after July 1, 2026:
Starting on July 1, 2028, borrowers with any loans taken out on or after July 1, 2026—even if they have loans from before that date—will only have access to one income-based repayment plan: the “Repayment Assistance Plan” (RAP).
Income-Based Repayment Options for Parent Borrowers
Parent PLUS borrowers have fewer options than student borrowers.
Parent PLUS borrowers with existing loans will be able to access whichever of the above Income-Based Repayment (IBR) Plans corresponds with their borrowing date, but only if they consolidate their loans into a Direct Consolidation Loan before July 1, 2026, and then enroll in an income-based repayment plan before July 1, 2028.
Parent PLUS borrowers who take out new loans on or after July 1, 2026, or who do not consolidate their loans before that date, will not have access to any income-based plans after July 1, 2026.
The below chart outlines the terms of each of these income-based plan options.
| Design Detail | Repayment Assistance Plan (RAP) | 2014 IBR (“New” IBR) | Original IBR |
|---|---|---|---|
| Income/Debt Requirement for Entry | None | None | None |
| Eligiblity | Direct Loan student borrowers (FFEL and Perkins borrowers may consolidate to DL to participate); Parent PLUS not eligible | Direct Loan and FFEL student borrowers whose loans originated between July 1, 2014 and July 1, 2026; Parent PLUS eligible if consolidated by July 1, 2026 and enrolled in an income-based plan by July 1, 2028 | Direct Loan and FFEL student borrowers whose loans originated before July 1, 2014; Parent PLUS eligible if consolidated before July 1, 2026 and enrolled in an income-based plan by July 1, 2028 |
| Monthly Payment Formula | Calculates a borrower’s total annual payment based on a percentage of their total adjusted gross income (AGI), ranging from 1-10%, then divides the total annual payment by 12 to calculate the monthly payment, then reduces that amount by $50 per month per dependent child, with a minimum payment of $10 per month for all borrowers | 10% of a borrower’s discretionary income, defined as their AGI above 150% of the federal poverty level (FPL), up to the fixed 10-year payment amount | 15% of a borrower’s discretionary income, defined as their AGI above 150% of the federal poverty level (FPL), up to the fixed 10-year payment amount |
| Minimum Payment Required? | Yes, $10/month | None | None |
| Maximum Repayment Period | 30 years/360 payments; any remaining balance discharged after 360 payments | 20 years/240 payments; any remaining balance discharged after 240 payments | 25 years/300 payments; any remaining balance discharged after 300 payments |
| Treatment of Interest Accrual While Enrolled in IDR | Waives all monthly unpaid accrued interest for the full repayment term (interest that is not fully covered by a borrower’s monthly income-based payment) | Subsidized loans: Waives all monthly unpaid accrued interest for up to 3 years Unsubsidized loans: No interest subsidy |
Subsidized loans: Waives all monthly unpaid accrued interest for up to 3 years Unsubsidized loans: No interest subsidy |
| Principal Pay-Down? | For borrowers whose monthly payment reduces their principal balance by less than $50, RAP provides a matching principal payment to ensure the borrower’s payment goes down by at least $50 per month | None | None |
| Standard Payment Cap? | No | Yes (a borrower’s monthly payment is capped at what their payment would be under the 10-year standard repayment plan) | Yes (a borrower’s monthly payment is capped at what their payment would be under the 10-year standard repayment plan) |
| Treatment of Married Borrowers | Allows borrowers whose tax status is married filing separately to exclude their spouse from both the borrower’s household income and family size | Allows borrowers whose tax status is married filing separately to exclude their spouse from both the borrower’s household income and family size | Allows borrowers whose tax status is married filing separately to exclude their spouse from both the borrower’s household income and family size |
| Is Discharged Debt Taxed? | Yes, as of January 1, 2026 | Yes, as of January 1, 2026 | Yes, as of January 1, 2026 |
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