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Currently, federal student loan borrowers can choose from three categories of repayment plans, but that will change soon. Starting July 1, 2026, new borrowers will have fewer repayment options as a result of President Donald Trump’s One Big Beautiful Bill Act (OBBBA).
Here are the three repayment categories available now for current students and borrowers.
- Standard repayment plan. Fixed monthly payments and the fastest payoff.
- Income-driven repayment (IDR) plans. Payment based on your income, with forgiveness available after 20–25 years. There are currently three different IDR plans (with each described below).
- Graduated repayment and extended repayment. Lower starting payments that may rise over time. Offers no forgiveness.
Beginning July 1, 2026, repayment plan categories will change in these ways:
- An updated standard plan will get tiered terms, some much longer than the current term of 10 years.
- A new Repayment Assistance Plan (RAP) will replace all current IDR plans.
- Graduated and extended repayment plans will no longer be available for new borrowers.
And, if you borrow any new federal loan after July 1, 2026 — even if you have older loans — all your loans must follow the new rules. That’s because all of your loans must be repaid under the same plan
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Key dates for student loan repayment changes
| Before July 1, 2026 | On July 1, 2026 | By July 1, 2028 |
|---|---|---|
| If you took out federal student loans before this date, you may still qualify for the following plans: the current standard plan, Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), and graduated or extended repayment. Some borrowers may also be eligible to enroll in Pay As You Earn (PAYE) until July 1, 2027, if they meet the plan’s requirements. You can stay on these plans until you pay off your loans, or the plan ends, as long as you don’t take out new loans after July 1, 2026. | The new repayment plan rules from the Trump administration’s budget bill start to take effect. The new Repayment Assistance Plan (RAP) becomes available. If you take out new loans on or after this date, you will only have access to RAP or the new, tiered standard repayment plan. | Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans permanently end. (New PAYE enrollments will be accepted only until July 1, 2027.) If you're plan is ending and you don't want to be automatically placed into RAP, switch to the IBR plan by July 1, 2028. Parent PLUS borrowers must have enrolled in the ICR plan by this date to maintain a path to income-driven repayment. |
About federal student loan repayment plans
Here are details about each repayment category, with upcoming changes and important dates noted.
Standard repayment plan
What’s new: As of July 1, 2026, terms for the standard repayment plan will vary from 10-25 years (depending on the total amount borrowed) for anyone taking out new federal student loans.
Best for: The standard repayment plan is best for borrowers who want to pay off their loans quickly and minimize interest costs. Borrowers who can best manage standard plan payments typically have debt equal to or less than their income, but it's possible some borrowers on this plan may have a high debt to low income ratio.
- Term: 10 years if you took out loans prior to July 1, 2026. If you have new loans on or after that date, your term will be as follows:
| Total student loan balance | New standard plan repayment term |
|---|---|
| Up to $24,999 | 10 years (120 monthly payments) |
| $25,000-$49,999 | 15 years (180 monthly payments) |
| $50,000-$99,999 | 20 years (240 monthly payments) |
| $100,000 or more | 25 years (300 monthly payments) |
- Payment structure: Fixed monthly payments (plus interest). Minimum payment of $50 per month.
- Benefits: Fastest payoff for most borrowers
- Drawbacks: If you owe a significant sum, your monthly bills could be more than you can afford. You don’t have built-in payment flexibility if income drops, though you can ask your student loan servicer about a deferment or forbearance.
- Eligibility note: All borrowers are automatically placed into the standard plan after their six-month grace period ends, unless they select a different plan.
Income-driven repayment (IDR) plans
What’s new: As of July 1, 2026, a new Repayment Assistance Plan (RAP) becomes available. Three types of legacy IDR plans — Income Based Repayment (IBR), Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) remain in place for now. Borrowers can enroll and remain on them until they pay off their loans or the plan ends, but only if they don’t take out new loans after July 1, 2026.
Income-driven repayment (IDR) plans set your monthly bill based on a portion of your income. Your time in repayment can be 20 or 25 years. When the term is over, any remaining debt gets forgiven.
- IDR is best if you need lower monthly payments. If your income changes or you lose your job, you can adjust your monthly IDR bills to be more manageable.
- If you’re pursuing IDR student loan forgiveness or Public Service Loan Forgiveness, IDR plans are also the best choice. To maximize the amount you get forgiven, choose the IDR plan that gives you the lowest monthly payment.
- However, because IDR plans extend your repayment term, you may pay more over time as interest accumulates.
To get into an IDR plan, you must apply through your student loan servicer or by going to studentaid.gov/IDR.
Below you can find out more about the three existing types of IDR plans and the new RAP rolling out on July 1.
Income-Based Repayment (IBR) plan details
Important note: You can enroll in IBR, but you can’t remain on it if you take out new loans after July 1, 2026. If you don’t take out new loans, enroll in IBR by July 1, 2028, to keep it until you pay off your loans or reach forgiveness.
Expand to learn more about IBR
Best for: Borrowers who won’t be taking out new loans after July 1, 2026, and who want to keep income-based payments. Also, borrowers who don’t want to be automatically moved into the new Repayment Assistance Plan (RAP).
- Term: 20 years if you started borrowing on or after July 1, 2014; 25 years if you have pre-July 1, 2014 loans.
- Payment structure: 10% of discretionary income per month if you started borrowing on or after July 1, 2014; 15% of discretionary income if you have pre-July 1, 2014 loans. (Calculate your discretionary income.)
- Benefits: Payments will never be higher than they would be for you under the standard plan. Provides an income-driven option other than RAP when other plans end.
- Drawbacks: May result in higher payments than other plans. Less favorable terms if you have older loans.
- Eligibility note: Borrowers no longer need to prove a partial financial hardship to qualify for this plan.
» Learn more about income-based repayment
Income-Contingent Repayment (ICR) plan details
Important note: You can enroll in ICR, but you can’t remain on it if you take out new loans after July 1, 2026. Also, ICR will permanently end for new and existing borrowers by July 1, 2028. If you’re on ICR and don't want to be automatically moved to RAP when ICR ends, switch to the IBR plan (if you’re eligible) before July 1, 2028.
Expand to learn more about ICR
Best for: Borrowers with federal parent PLUS loans who want payments tied to income.
- Term: 25 years.
- Payment structure: 20% of discretionary income.
- Benefits: Only IDR option available to parent PLUS borrowers.
- Drawbacks: Usually the highest payments among IDR plans; forgiveness takes 25 years.
- Eligibility note: Parent PLUS borrowers are required to consolidate into a Direct Consolidation Loan to enroll in ICR, which also provides a path to Public Student Loan Forgiveness. Due to upcoming changes, parent PLUS borrowers must complete consolidation by July 1, 2026, to avoid being permanently blocked from income-driven repayment. The Education Department recommends submitting the consolidation application by April 1, 2026. Read Parent PLUS Borrowers: Act ASAP to Keep Income-Driven Repayment.
» Learn more about income-contingent repayment
Pay as You Earn (PAYE) plan details
Important note: If you don’t take out new loans after July 1, 2026, you can enroll in and remain on PAYE until it permanently ends by July 1, 2028. PAYE enrollments will be accepted only until July 1, 2027. If you’re on PAYE and want to avoid being automatically moved to RAP when PAYE ends, switch to the IBR plan (if you’re eligible) before July 1, 2028.
Expand to learn more about PAYE
Best for: Borrowers with graduate school loans; borrowers who expect to earn a high income in the future.
- Term: 20 years.
- Payment structure: 10% of discretionary income.
- Benefits: Shortest forgiveness timeline and lowest payments for people with graduate school debt. Payments will never be higher than they would be for you under the standard plan.
- Drawbacks: Plan will be permanently ending. PAYE enrollment closes July 1, 2027.
- Eligibility note: You must have taken out your loans on or after Oct. 1, 2011, to qualify for PAYE. (Also, see important note above.)
» Learn more about Pay as you Earn (PAYE)
New Repayment Assistance Plan (RAP) details
Important note: RAP will be the only income-driven repayment option available to new borrowers beginning July 1, 2026.
For new borrowers who have loans first disbursed on or after July 1, 2026, RAP will be the only available IDR plan. Payments are tied to income, and student loan forgiveness, including Public Service Loan Forgiveness, is possible.
- Term: 30 years.
- Payment structure: 1-10% of your annual adjusted gross income (AGI); percentage is based on earning level. Payment reduced by $50 for each dependent claimed on your tax return. The plan requires $10 flat payments for those earning $10,000 per year or less.
- Benefits: Unpaid interest not charged if the payment amount isn’t enough to cover monthly accrued interest. Ensures principal balance is reduced by at least $50 each month.
- Drawbacks: May result in higher monthly payments for most borrowers when compared to PAYE or IBR, and the longer term will cost some borrowers more over the life of the loan. Also, federal student loans issued after July 1, 2027, will no longer offer economic-hardship deferment and general forbearance timelines will shorten. As a result, it's likely that borrowers with no income will have to make a minimum $10 monthly payment under RAP.
- Eligibility note: Not available for parent PLUS borrowers. Borrowers enrolled in PAYE and ICR will be automatically transferred to RAP by July 1, 2028. If you don’t want to be on RAP, you must enroll in the IBR plan before that date.
» Learn more about Repayment Assistance Plan (RAP)
Compare legacy IDR plans vs. RAP
| Feature | RAP | IBR/PAYE/ICR |
|---|---|---|
| Repayment term / time to forgiveness | 30 years for all borrowers. | 20 or 25 years depending on plan and loan type. |
| Income used to calculate payment | Adjusted gross income (AGI). | Discretionary income. |
| Amount of income protected from payment calculation | None. | 100% to 150% of the federal poverty guideline protected (varies by plan). Also depends on your location and family size. |
| Payment amount range | 1%–10% of your AGI; $10 minimum payment. | 10%–20% of discretionary income; $0 payments possible. |
| Family size or dependent adjustment | $50 reduction per dependent claimed on federal tax return. | Payment adjusted based on total family size. |
| Interest accrual if payment doesn't cover interest | Unpaid interest is not added to the loan balance. | No interest subsidy for ICR. For PAYE and IBR, monthly unpaid interest waived for first three years on subsidized loans. |
| Guaranteed principal reduction | Yes, at least $50 per month. | None. |
| Note: We have not included the Saving on a Valuable Education (SAVE) plan in this comparison chart, because it will end in the near future. If you’re enrolled in SAVE, watch for communication from the ED or your loan servicer about transitioning from SAVE. | ||
🤓 Nerdy Tip
The best repayment plan for you depends on your financial situation, amount of student debt and goals. Before choosing a new plan, plug your information into the Education Department's Loan Simulator to estimate your payments. Generally, you can change repayment plans at any time. Extended and graduated repayment plans
What’s new: As of July 1, 2026, the extended and graduated repayment plans will not be available to borrowers who take out loans after that date.
If you need lower monthly payments but IDR doesn’t make sense for your income level, you may consider the extended or graduated repayment options. These plans also allow borrowers to have predictable payments over time.
- With both plans, start your repayment journey with lower monthly payments that may gradually increase over time.
- Loan forgiveness, including Public Service Loan Forgiveness, isn't offered with these plans. That means you’ll pay your debt off completely by the end of your repayment term.
- Extended or graduated repayment may be a good choice for professionals who expect their income to grow significantly during their career — like doctors, who don’t earn as much during residency but then go on to earn high salaries.
More about extended repayment plans
Best for: Borrowers with more than $30,000 in federal loans who need lower payments than the standard 10-year plan offers.
- Term: Up to 25 years.
- Payment structure: Can be fixed (same payment each month) or graduated (payments increase every two years).
- Benefits: Payments are generally lower than under the standard or graduated repayment plans.
- Drawbacks: You’ll likely pay significantly more interest over time compared with 10-year standard repayment, because it accumulates over a much longer period of time. No possibility for loan forgiveness.
- Eligibility note: Only borrowers who take out loans before July 1, 2026, can use this plan. Must owe more than $30,000 to qualify.
» Learn more about the extended repayment plan
More about graduated payment plans
Best for: Borrowers whose income is low now, but likely to rise steadily over time.
- Term: 10 years (up to 30 for consolidation loans).
- Payment structure: Starts with low monthly payments — sometimes interest-only — then increases every two years until your repayment term is over and you pay off your debt.
- Benefits: May free up money in the short term for other goals (like a home down payment) while costing less in interest than many IDR plans.
- Drawbacks: Payments can eventually triple. You need to be confident you’ll afford the higher bills later. Standard repayment is usually the better choice if you can handle it from the start. No possibility for loan forgiveness.
- Eligibility note: Only borrowers who take out loans before July 1, 2026, can use this plan.
» Learn more about the graduated repayment plan
Repayment plans for private student loans
If you have private student loans, check your loan origination documents or ask your lender what repayment options are available. Most private lenders don’t offer repayment plans tied to your income, though some may temporarily reduce payments if you call and ask.
If you have a credit score in at least the high-600s — or a co-signer who does — refinancing your private student loans at a lower interest rate can lower your monthly bills and the amount you’ll pay overall.
Dozens of lenders offer student loan refinancing; compare your options before you apply to find the lowest possible rate.
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