Federal student loan repayment plans underwent major changes on July 1, 2026, as a result of the One Big Beautiful Bill Act (OBBBA). The new Repayment Assistance Plan (RAP) and Tiered Standard plan were rolled out. Most legacy plans still exist. And which repayment plans you have access to depends on whether you take out new federal student loans.
Here's a breakdown of plans available based on when you borrowed or will borrow, followed by details about each plan.
You take out new federal student loans on or after July 1, 2026
Borrowers in this category have only these two repayment options to choose from:
- Repayment Assistance Plan (RAP). This is the only income-driven repayment (IDR) plan available to borrowers of new loans. Payments are based on your annual adjusted gross income (AGI). The more you earn, the higher your required payment. Find details about RAP below.
- Tiered Standard plan. This is a new version of the standard repayment plan, and it bases your fixed monthly payment on your total outstanding loan balance when you enter repayment. Terms can be 10, 15, 20 or 25 years. Find details about the Tiered Standard plan below.
You have only loans taken out before July 1, 2026
You still have access to all legacy plans (except the SAVE plan which has ended). You will retain this access only if you don't take out new federal student loans on or after July 1, 2026. Here are your options:
You can also choose to move to the RAP plan, but you cannot move to the Tiered Standard plan.
Important note for legacy borrowers: All of your loans must be repaid under the same plan, including your older loans. If you take out a new federal student loan (even a small one), all of your loans will move to either the RAP or Tiered Standard plan. This includes consolidating your loans. If you don't select a plan, you will automatically be placed in the Tiered Standard plan.
About the new student loan repayment plans
Here are details about the two new federal student loan repayment plans.
Repayment Assistance Plan (RAP) details
For new borrowers who have loans first disbursed on or after July 1, 2026, RAP is 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; 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: Likely to result in higher monthly payments for most borrowers when compared to legacy IDR plans, and the longer term will cost some borrowers more over the life of the loan. Also, federal student loans disbursed 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 still have to make a minimum $10 monthly payment under RAP.
- Eligibility note: Legacy borrowers (those who had student loans before July 1, 2026) can also opt to move into RAP.
» Learn more about Repayment Assistance Plan (RAP)
Tiered Standard plan
Available only to new borrowers who have loans first disbursed on or after July 1, 2026. Your repayment timeline is based on your total loan balance when you enter repayment. Payments don't qualify for any type of forgiveness.
- Term: Depends on loan balance (see table below)
Total Direct Loan outstanding principal balance | Tiered Standard Plan maximum repayment terms |
|---|---|
Less than $25,000 | 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: Has fixed monthly payments. Loan term is determined by the total loan balance. That balance (plus interest) divided by the number of months in the term equals the monthly payment amount. There is a 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: New borrowers who don't choose a repayment plan are automatically placed into the Tiered Standard plan after their six-month grace period ends.
🤓Nerdy Tip
Before choosing a new plan, plug your information into the Education Department's repayment calculator to estimate your payments. About the legacy student loan repayment plans
These plans are available only to borrowers who had federal student loans prior to July 1, 2026, and who don't take out new loans or consolidate loans.
Legacy income-driven repayment (IDR) plans
IDR plans set your monthly bill based on your income. When the term is over, any remaining debt gets forgiven. Legacy IDR plans base payments on discretionary income, and the RAP plan bases payments on annual adjusted gross income.
Income-Based Repayment (IBR) plan details
- 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 under the standard plan. Provides an income-driven option other than RAP when PAYE and ICR end.
- Drawbacks: May result in higher payments than other plans. Less favorable terms if you have older loans.
- Eligibility note: IBR will be the only legacy IDR plan that will remain after July 1, 2028. It is only available to borrowers who don't take out new federal student loans on or after July 1, 2026. Borrowers no longer need to prove a partial financial hardship to qualify for IBR.
» Learn more about income-based repayment
Pay as You Earn (PAYE) plan details
- 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 under the standard plan.
- Drawbacks: Plan will be permanently ending on July 1, 2028.
- Eligibility note: You must have taken out your loans on or after Oct. 1, 2011, to qualify for PAYE. Legacy borrowers can still enroll in PAYE until July 1, 2027, and remain on it until it ends in 2028. At that time, if a different repayment plan hasn't been chosen (IBR, standard or RAP), borrowers will be automatically placed into RAP.
Income-Contingent Repayment (ICR) plan details
- Term: 25 years.
- Payment structure: 20% of discretionary income.
- Benefits: Gives parent PLUS borrowers a path to income-driven repayment and forgiveness, but only if borrowers consolidated their loans prior to July 1, 2026.
- Drawbacks: Usually the highest payments among IDR plans; forgiveness takes 25 years.
- Eligibility note: This plan will end on July 1, 2028. Legacy borrowers can enroll in ICR until it ends. At that time, if a different repayment plan hasn't been chosen (IBR, standard or RAP), borrowers will be automatically placed into RAP.
» Learn more about income-contingent repayment
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 has ended. Borrowers enrolled in SAVE have begun receiving notices about transitioning from SAVE. | ||
Standard repayment plan
- Term: Ten years. For consolidated loans, up to 30 years.
- Payment structure: Fixed monthly payments (plus interest).
- Benefits: Predictable monthly payments. 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: Not available to borrowers who take out new federal student loans on or after July 1, 2026.
» Learn more about the standard repayment plan
Graduated and extended repayment plans
For borrowers who need lower monthly payments, but IDR doesn’t work for their income level, the graduated or extended repayment plans might make sense. Payments on these plans are based on amount owed instead of income. (Note: These plans aren't available for borrowers who take out new federal student loans on or after July 1, 2026.)
- With both plans, you start with lower monthly payments that may gradually increase over time.
- Loan forgiveness, including Public Service Loan Forgiveness, isn't offered with these plans.
- Graduated or extended 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.
Extended repayment plan details
- 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: Must owe more than $30,000 in federal student loans to qualify. Not available to borrowers who take out new federal student loans on or after July 1, 2026.
» Learn more about the extended repayment plan
Graduated repayment plan details
- 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. Amount can't be more than triple any previous payment.
- 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 significantly increase over the term. You need to be confident you’ll afford the higher bills later. No possibility for loan forgiveness.
- Eligibility note: Not available to borrowers who take out new federal student loans on or after July 1, 2026.
» 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 refinancing options before you apply to find the lowest possible rate.
