2026 Student Loan Changes Explained: RAP, IBR, PAYE
The biggest changes to federal student loan repayment took effect July 1, 2026. Here is what changed, in plain language, with links to the official sources.
Two plans for new loans: Tiered Standard and RAP
Since July 1, 2026, borrowers can enroll in the new Tiered Standard plan, with fixed terms of 10, 15, 20 or 25 years depending on how much you borrowed, or the new income-driven Repayment Assistance Plan (RAP). (Source: U.S. Department of Education fact sheet, July 1, 2026 ↗)
How RAP works
- Payments are 1% to 10% of your AGI, divided by 12, minus $50 a month per dependent, with a $10 minimum.
- Unpaid monthly interest is waived when you pay on time.
- If your payment reduces principal by less than $50, the government adds up to $50 toward principal.
- Remaining balance forgiven after 30 years of qualifying payments.
- RAP payments count toward PSLF.
Older plans are closing
| IBR | Open only to loans disbursed before July 1, 2026. 10% of discretionary income for new borrowers, 15% for others. |
|---|---|
| PAYE | Ends no later than July 1, 2028. |
| ICR | Ends no later than July 1, 2028. |
| Parent loans | Never eligible for RAP. Parent PLUS loans consolidated after July 1, 2026 can't use IBR or ICR. |
Source: Federal Student Aid, Top FAQs About Income-Driven Repayment Plans ↗. Last checked Oct 21, 2026.
What to do now
- Log in to studentaid.gov and confirm your loan types and current plan.
- If you work in public service, certify your employment for PSLF.
- Compare RAP with your current plan using our estimator, then ask your servicer before switching.
- Check state loan repayment programs and programs for your profession.
What changed for student loans on July 1, 2026?
New Tiered Standard and Repayment Assistance Plan (RAP) options opened, IBR closed to newly disbursed loans, and PAYE and ICR are set to end by July 1, 2028.
Does RAP count toward PSLF?
Yes. RAP is a qualifying repayment plan for PSLF.