The standard repayment plan is the basic plan for repaying federal Direct Loans. Student loan servicers automatically place borrowers into a standard plan when they enter repayment, unless the borrower previously chose a different option. As of 2026, there are two versions of the standard repayment plan:
- The legacy Standard Repayment Plan is the original 10-year repayment plan. It’s still available to borrowers who have not taken out or consolidated any loans on or after July 1, 2026.
- The Tiered Standard Repayment Plan is the new version. It has a repayment term of 10, 15, 20 or 25 years based on your outstanding loan balance. It applies to everyone who takes out or consolidates a federal loan on or after July 1, 2026.
Here's how each one works, along with a side-by-side comparison.
The legacy Standard Repayment Plan
This is the original standard plan. You're automatically placed in it when you start repayment, unless you select a different option — but only if all of your federal loans were disbursed before July 1, 2026, and you haven't borrowed or consolidated since.
Who qualifies: You must have federal student loans, all disbursed before July 1, 2026, with no new loans or consolidations after that date. Taking out even one new loan or consolidating loans moves all of your Direct Loans onto the Tiered Standard Plan or the new Repayment Assistance Plan (RAP) income-driven plan. These are the only two repayment plans available if you take out new federal student loans.
How payments are calculated: The plan divides what you owe into 120 equal monthly payments over 10 years. Payments can't be less than $50 a month, unless your outstanding balance is less.
Legacy Standard Repayment Plan example: Say you have a $35,000 student loan at a 6.5% interest rate. Under this plan, you'd pay $397 a month and $47,690 total over 10 years.
The Tiered Standard Plan
This new version of the standard plan took effect July 1, 2026, as part of President Trump's tax and spending law (the One Big Beautiful Bill Act). It replaces the old standard, graduated and extended plans for anyone who takes out or consolidates a federal student loan on or after that date.
Who qualifies: Anyone who takes out a new federal student loan, or consolidates existing loans, on or after July 1, 2026. Once that happens, all of your Direct Loans — including older ones — move onto this plan or the RAP. Borrowers lose access to the old standard, graduated, extended and legacy income-driven plans.
How payments are calculated: Instead of a flat 10-year term, your repayment length depends on your total loan balance when you enter repayment:
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) |
As with the legacy plan, payments must be at least $50 a month.
If you’re already on the Tiered Standard Plan and borrow additional loans that are placed on the same plan, your repayment term will be recalculated. An example would be if you left school, started repayment, returned to school and took out a new loan.
Tiered Standard Repayment Plan example: Say you have $35,000 in Direct Loans, which falls into the 15-year repayment tier. Using a 6.5% interest rate, you would have a payment of $304 a month and pay a total of $54,880 over 15 years.
Comparing the legacy Standard Plan and Tiered Standard Plan
You can’t choose between the two versions of standard repayment plans. The one you qualify for depends solely on whether you take out new student loans on or after July 1, 2026, but knowing their differences can be helpful — for example, when moving from legacy to tiered or comparing to income-driven plans.
Legacy Standard Plan | Tiered Standard Plan | |
|---|---|---|
Who qualifies | Borrowers with federal student loans disbursed before 7/1/2026; no new loans/consolidations since | Borrowers with federal student loans taken out or consolidated on/after 7/1/2026 |
Repayment term | 10 years; up to 30 years for consolidation loans | 10 to 25 years, based on the total loan balance when entering repayment |
Number of payments | 120 | 120 to 300, depending on the loan balance and term |
Payment amount | Same fixed amount each month | Same fixed amount each month |
Minimum payment | $50 | $50 |
Counts toward Public Service Loan Forgiveness (PSLF) | Yes. But the loan is likely to be paid off before you reach the 120 required payments. | No |
🤓Nerdy Tip
Plug your student loan information into the Education Department’s Loan Simulator to get an idea of how much you’d pay under the legacy Standard Repayment Plan, Tiered Standard Repayment Plan or other repayment plans.Is a standard repayment plan right for you?
A standard repayment plan can make sense if you want to pay off your loan faster and reduce the amount you pay overall. With either version of the standard repayment plan, your payment is likely to be higher than if you use an income-driven plan. However, you will pay your loan off faster and pay less interest overall. In general, it’s best to stay with a standard repayment plan if you can afford it.
Plug your own student loan information into the Education Department’s Loan Simulator to get an idea of how much you’d pay under the standard repayment plan, as well as other repayment plans.
You might also choose a standard repayment plan if you prefer predictable, fixed payments. Income-driven repayment can provide more manageable payments, but if your income increases, your payment will adjust accordingly.
Finally, a standard repayment plan is not a good option if you intend to pursue Public Service Loan Forgiveness. Payments made under the Tiered Standard Plan don’t count toward PSLF. Payments under the legacy Standard Repayment Plan do, but with its 10-year term, you’re likely to pay off your loan entirely by the time you qualify for forgiveness. You may be better off with an IDR plan that has the smallest monthly payment that counts toward forgiveness.
Article sources
NerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines.
- 1.CRI (Official Servicer of Federal Student Aid). What Is the Tiered Standard Plan?. Accessed Jul 20, 2026.
