Is your student loan repayment plan about to be eliminated? What to know before July 1.

Web Desk May 4, 2026

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Is your student loan repayment plan about to be eliminated? What to know before July 1.

Repaying your student loans isn’t just costly — it can also be confusing. Both federal and private student loan borrowers have numerous repayment options with varying repayment periods and monthly payments.

On top of that, many of the plans for federal loans are changing in 2026, as updates from the One Big Beautiful Bill Act (OBBBA) are implemented starting in July. Drawn-out court battles can also impact student loan repayment, as happened with the doomed SAVE repayment plan.

To help you navigate your student loan payments, here’s a closer look at what repayment options are available for federal loans now, new repayment plans coming later this summer, and payment options for private student loan borrowers.

Current federal student loan repayment plans

These are all the current student loan repayment options. If you have student loans that have already been disbursed, you’re likely on one of the following plans:

Fixed repayment plans

These repayment plans are eligible for Direct Subsidized and Unsubsidized Loans and PLUS Loans for students and parents.

Standard Repayment Plan: This is a 10-year repayment plan. Your loan details affect your monthly payment amount, which is a fixed payment that will ensure your loan is paid in full within 10 years.
Graduated Repayment Plan: Under this plan, your monthly payments start lower (when your income is presumably lower as a recent grad) and grow over the repayment period. Payments typically increase every two years. You’ll pay off the loan in full within 10 years.
Extended Repayment Plan: Like the name implies, this repayment plan offers an extended 25-year payoff period. Monthly payments may be fixed or graduated to ensure you pay off the loan in full within the extended period. If you have Direct Loans, your balance must be at least $30,000 to qualify for the extended repayment plan.

If all of your federal loans were disbursed before July 1, 2026, you’ll still be eligible for the above repayment plans when the OBBBA changes take effect this year.

If you have at least one federal loan first disbursed on or after July 1, 2026, you’ll be required to repay all of your Direct Loans under either the Repayment Assistance Plan (RAP) or the Tiered Standard Plan, outlined below.

Income-driven repayment (IDR) plans

Income-based plans are available for Direct Subsidized and Unsubsidized Loan borrowers and Direct PLUS loans made to students. Parent PLUS Loans are generally not eligible, though there are some exceptions after consolidating.

Income-Based Repayment (IBR): Monthly IBR payments are either 10% or 15% of your discretionary income (depending on when you received the loan), and won’t exceed the amount you would pay under the 10-year Standard Repayment Plan. You’ll make payments for 20 or 25 years, after which any remaining balance can be forgiven.
Income-Contingent Repayment (ICR): The ICR plan charges the lesser of two payment options: either 20% of your discretionary income or the amount you would pay under a Standard Repayment Plan with a 12-year term. Make payments for 25 years before you are eligible for forgiveness of the remaining amount.
Pay As You Earn (PAYE) repayment: The PAYE plan is available to borrowers who got their first federal loans after Oct. 1, 2007, and who borrowed a Direct Loan (or Direct Consolidation Loan) after Oct. 1, 2011. This plan’s monthly payments are equal to 10% of discretionary income, but like the IBR plan, your payment won’t exceed what you would pay under a 10-year Standard Repayment Plan. Make payments for 20 years before you can qualify for forgiveness.

But you should note: Both ICR and PAYE plans will be phased out by July 1, 2028. If you’re on either of these plans, the Department of Education will have more information to help you move to another plan before that date.

If all of your federal loans were disbursed before July 1, 2026, you can still access IDR plans after the changes later this year.

If any of your federal loans are disbursed after July 1, 2026, you’ll be required to repay all of your Direct Loans under either the Repayment Assistance Plan (RAP) or the Tiered Standard Plan, outlined below.

Learn more: Do I qualify for student loan forgiveness? What’s changed under Trump.

SAVE Plan

The SAVE plan was created during the Biden administration as an income-driven repayment option. As of earlier this year, the SAVE plan has been eliminated and is no longer an option for federal loan repayment.

If you’re currently enrolled in the SAVE plan, your student loan servicer will begin issuing notices on July 1, 2026, with instructions for enrolling in a new plan. You’ll have 90 days to choose a plan. Borrowers who take no action will be automatically enrolled in either the existing Standard Repayment Plan or the new Tiered Standard Plan.

New federal student loan repayment plans starting July 2026

Upcoming federal student loan changes under the One Big Beautiful Bill Act will affect both new borrowers and borrowers still repaying older federal loans.

If you have a Direct Loan disbursed on or after July 1, 2026, the following two plans will be your only repayment options. If you receive a federal loan after that date (even if you have previous loans disbursed before July 2026), you will have to use one of these plans to repay all of your loans.

If all of your loans were disbursed before July 2026, you’ll remain eligible for the existing fixed repayment plans and income-driven repayment plans outlined above, as well as the Repayment Assistance Plan. You won’t have access to the Tiered Standard Plan.

Repayment Assistance Plan

The Repayment Assistance Plan (RAP) is a new version of income-driven repayment. Any remaining balance on your loans can be forgiven after you make 30 years of qualifying payments.

Monthly payments are based on your income and the number of dependents you claim. Your payment is a percentage (ranging from 1% to 10%) of your annual adjusted gross income, divided by 12 for the monthly payment, then subtracted by $50 for every dependent you claim on your taxes. Your monthly payments cannot be less than $10.

For example, let’s say your AGI is $65,000 and you have one child whom you claim as a dependent. Your base payment is 6% of your AGI, or $325 per month. But you can subtract $50 from your monthly payment for your dependent, reducing your real monthly payment to $275 per month.

Here’s an estimate of what your monthly payment would be under RAP:

Annual adjusted gross income (AGI)	Monthly payment amount*
$0 – $10,000	$10.00
$10,001 – $20,000	$10.00 – $16.67
$20,001 – $30,000	$33.34 – $50.00
$30,001 – $40,000	$75.00 – $100.00
$40,001 – $50,000	$133.34 – $166.67
$50,001 – $60,000	$208.34 – $250.00
$60,001 – $70,000	$300.01 – $350.00
$70,001 – $80,000	$408.34 – $466.67
$80,001 – $90,000	$533.34 – $600.00
$90,001 – $100,000	$675.01 – $750.00
More than $100,000	At least $833.33

Table source: StudentAid.gov

*This chart assumes you have no dependents. Subtract $50 from the monthly payment amount for each dependent you claim on your federal income tax return for a more accurate estimate.

If your payments are not enough to pay off the accrued interest each month, any unpaid interest will be canceled. However, only the interest that accumulates from due date to due date after entering RAP will be subsidized. Interest that accrues when your loan is in deferment or that accrued before entering RAP won’t be canceled.

This means that if you make all of your payments on time and don’t pause your loans, your outstanding balance will never go higher than your original balance when you entered the Repayment Assistance Plan.

Tiered Standard Plan

Monthly loan payments under the Tiered Standard Plan are based on your loan balance when you enroll in the plan, your interest rate, and your repayment term. Your monthly payments are fixed and designed to repay your loan in full within a specific period. That maximum repayment period is based on the amount you owe:

Less than $25,000: 10 years
$25,000 to under $50,000: 15 years
$50,000 to under $100,000: 20 years
$100,000 or more: 25 years

Monthly payments must be at least $50, but may be more to ensure you repay the full loan within the defined period. You will not have access to the Tiered Standard Plan if all of your federal loans have already been disbursed (before July 1, 2026).

Private student loan repayment plans

Repayment plans for private student loans tend to focus on how you’ll make payments while in school — or whether you will at all. Unlike federal student loans, you often won’t have the flexibility to change your repayment plan after you sign for the loan.

Each lender has its own specific plans, but here are a few common forms of repayment:

Fixed payments: With this option, you’ll make payments toward the principal and interest on your loan. You might choose a small monthly payment amount (such as $25) while you’re in school, or begin immediate repayment at the full standard payment amount.
Interest-only payments: While in school, you make interest-only payments toward your loan. This won’t reduce the principal balance, but will keep your interest charges from growing. After graduation, you’ll begin making full payments toward the principal and interest.
Deferred payments: You may choose to defer payments completely while in school (and usually for a grace period following your graduation). This may be the most costly long-term option, since interest typically accrues for years before you begin making payments after graduation.

Student loans generally begin to accrue interest as soon as the loan is disbursed, so the longer you wait to begin payments, the more interest you’ll owe on your loan amount.

Once you graduate (and after a grace period), you’ll likely take on a standard repayment schedule based on your loan terms. You’ll make fixed monthly payments toward your interest and principal throughout the lifetime of the loan until you pay it off in full.