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We want you to be able to make decisions about your student loans with confidence. We offer objective, independent, straightforward guidance on student loans and refinancing lenders. While our site doesn't answer every question or have every lender, we are proud to provide the information and tools you need — free of charge — to make the best decisions for yourself. So how do we make money? We get paid in two ways. First, you can hire us to develop a student loan strategy for you and implement that strategy on your behalf. Second, our partners compensate us. This may influence which refinancing lenders we write about, but it doesn't affect our recommendations or advice. Our partners cannot pay us to guarantee favorable reviews of their products or services.Federal student loan repayment changed more in the past year than in the previous decade. The SAVE plan is dead. Two new plans — the Repayment Assistance Plan (RAP) and the Tiered Standard Plan — launched July 1, 2026. PAYE and ICR stop accepting new borrowers on the same date and sunset entirely by July 2028. IBR is the only legacy income-driven plan that survives long-term. If your first federal loan is disbursed on or after July 1, 2026, RAP and the Tiered Standard plan are your only two options — RAP vs. the Tiered Standard plan walks through how new borrowers choose.
What Changed in Federal Student Loan Repayment
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, overhauled federal student loan repayment. A federal court in the Eastern District of Missouri vacated the SAVE plan on March 10, 2026, and the Department of Education announced the transition plan on March 27, 2026.
Since July 1, 2026, servicers have been sending notices to SAVE borrowers in batches, each giving that borrower 90 days to choose a new plan. Borrowers who don’t respond within 90 days are auto-enrolled into either Standard Repayment or the new Tiered Standard Plan. You can contact your servicer to switch without waiting for your notice. For the notice-tranche timeline and the earliest dates a first bill can come due, see when payments start under the new plans.
On the same date, two new plans became available: RAP, a new income-driven plan, and the Tiered Standard Plan, a fixed-payment option with terms based on your balance. For loans first disbursed on or after July 1, 2026, only RAP and the new Standard Repayment Plan are available — no legacy plans.
PAYE and ICR are closed to loans made on or after July 1, 2026. Borrowers with only older Direct Loans can still apply until July 1, 2027, according to the Department of Education, and both plans end June 30, 2028. Borrowers still on those plans at sunset will be automatically moved to RAP (if eligible) or IBR. IBR remains permanently open to borrowers with loans disbursed before July 1, 2026.
Related: Student Loan Changes on July 1, 2026: What Borrowers Need to Do
Fixed-Payment Repayment Plans
Fixed-payment plans set your monthly amount based on your loan balance and interest rate — your income doesn’t factor in. These plans offer no path to forgiveness (other than PSLF, where applicable), but they cost less in total interest because you’re paying down principal from the start.
Standard Repayment
The default plan for all federal student loans. Fixed monthly payments over 10 years. If you never choose a plan, this is what you’re on. It produces the lowest total cost of any repayment option but the highest monthly payment.
Graduated Repayment
Payments start low and increase every two years over a 10-year term. Designed for borrowers who expect their income to rise. You’ll pay more in total interest than Standard because the early payments barely cover interest. Available only for loans disbursed before July 1, 2026.
Related: Graduated Repayment Plan
Extended Repayment
Stretches repayment to 25 years with either fixed or graduated payments. Available only to borrowers with more than $30,000 in outstanding Direct Loans. Lower monthly payments than Standard, but significantly more interest over the life of the loan. Like Graduated, this plan is available only for loans disbursed before July 1, 2026.
Related: Extended Repayment Plan
Tiered Standard Plan (New — July 2026)
A new fixed-payment plan created by the OBBBA. Unlike the 10-year Standard plan, the Tiered Standard Plan adjusts its term based on your total outstanding balance: 10, 15, 20, or 25 years. It’s one of two auto-enrollment destinations for SAVE borrowers who don’t choose a plan within their 90-day window.
The Tiered Standard Plan is not income-driven — there’s no forgiveness timeline, no income recertification, and no payment tied to what you earn.
Related: Tiered Standard Repayment Plan
Income-Driven Repayment Plans
Income-driven repayment (IDR) plans calculate your payment based on your income and family size. Under legacy IDR plans like IBR, your payment can be as low as $0 if your income is low enough. Under RAP, the minimum is $10 per month. All IDR plans offer loan forgiveness after a set number of years — and all qualify for Public Service Loan Forgiveness (PSLF) if you work for an eligible employer.
The trade-off: IDR plans extend your repayment timeline. Under legacy plans like IBR, interest can be capitalized, meaning you may owe more than you originally borrowed before forgiveness kicks in. RAP handles this differently — see below.
Related: Income-Driven Repayment Plans
Income-Based Repayment (IBR)
IBR is the only legacy income-driven plan that remains permanently available. If your loans were disbursed before July 1, 2014, your payment is 15% of discretionary income with forgiveness after 25 years. If your first loan was disbursed on or after July 1, 2014, it’s 10% of discretionary income with forgiveness after 20 years. IBR caps your payment at the 10-year Standard amount.
IBR is available to any borrower with federal Direct Loans disbursed before July 1, 2026. The OBBBA removed the partial financial hardship requirement, so borrowers who were previously denied IBR due to high income can now enroll.
Related: Income-Based Repayment (IBR)
Repayment Assistance Plan — RAP (New — July 2026)
RAP is the new default income-driven plan for borrowers taking out loans after July 1, 2026. Existing borrowers have been able to opt in voluntarily since July 1, 2026, with auto-enrollment by July 2028 for those still on sunsetting plans.
RAP works differently from legacy IDR plans. Instead of using discretionary income, RAP places your full adjusted gross income (AGI) into one of 11 income brackets, each with a corresponding payment percentage — ranging from 1% at the lowest income levels to 10% at the highest. There is no poverty guideline buffer. RAP also deducts $50 per month from your payment for each dependent you claim. Unlike IBR, RAP has a $10 minimum monthly payment — there are no $0 payment months — and no payment cap, so high earners can pay more under RAP than they would under IBR’s 10-year Standard cap. Forgiveness comes after 30 years — longer than IBR’s 20–25 year timeline.
RAP includes two features that no legacy plan offers. First, if your monthly payment doesn’t cover all accruing interest, the unpaid interest is waived — not capitalized, not added to your balance. This eliminates the negative amortization that causes balances to grow under IBR and PAYE. Second, if your payment doesn’t reduce your principal by at least $50, the Department of Education contributes up to $50 per month toward principal reduction.
Parent PLUS borrowers are not eligible for RAP, even after consolidation.
Related: What Is the Repayment Assistance Plan (RAP)?
Income-Contingent Repayment (ICR) — Sunsets July 2028
ICR calculates payments at 20% of discretionary income or the amount you’d pay on a 12-year fixed plan multiplied by an income percentage factor the Department publishes each year — whichever is lower. Forgiveness comes after 25 years. Only Direct Loans made before July 1, 2026 can be repaid under ICR, and taking out any new Direct Loan on or after that date ends ICR access — the gate is the loan date, not an enrollment cutoff. Whether a borrower who was not already in ICR can newly enroll is unsettled: the published regulation and the Department’s own current guidance disagree, and the Department is still accepting applications. If ICR fits your situation, apply rather than assume you are barred. The plan sunsets June 30, 2028 either way.
ICR is the only income-driven plan available to borrowers with consolidated Parent PLUS loans. If you’re a Parent PLUS borrower, the Direct Consolidation Loan had to be disbursed on or before June 30, 2026 — a disbursement deadline, not an application deadline, so the consolidation had to be complete, not just submitted, by that date. Enrolling in ICR is a separate step on a later clock: the one ICR payment that opens IBR can be made any time through June 30, 2028, and you should elect IBR before July 1, 2028. Missing this window permanently eliminates IDR and forgiveness options for unconsolidated Parent PLUS loans.
For high-income borrowers pursuing PSLF, ICR’s 12-year fixed payment prong can produce lower payments than IBR when your balance is low relative to your income.
Related: Income-Contingent Repayment (ICR)
Pay As You Earn (PAYE) — Sunsets July 2028
PAYE sets payments at 10% of discretionary income with forgiveness after 20 years and a payment cap at the 10-year Standard amount. It’s functionally similar to new-borrower IBR but with different eligibility rules. Only Direct Loans made before July 1, 2026 can be repaid under PAYE, and any new Direct Loan on or after that date ends PAYE access. As with ICR, whether a borrower who was not already in PAYE can newly enroll is unsettled — the published regulation and the Department’s current guidance disagree — so apply rather than assume you are barred. PAYE sunsets June 30, 2028. Borrowers who make no election by July 1, 2028 are moved to the Repayment Assistance Plan, or to IBR for loans RAP cannot take.
Related: PAYE vs. RAP
Comparing IDR Plans
The right IDR plan depends on when your loans were disbursed, your income trajectory, and whether you’re pursuing forgiveness through PSLF or the IDR forgiveness timeline.
Related:
Temporary Relief: Deferment and Forbearance
Deferment and forbearance aren’t repayment plans — they’re temporary pauses. Both stop your required monthly payments, but interest usually continues accruing (except on subsidized loans during certain deferments). They exist for short-term hardships: job loss, medical emergencies, and returning to school.
Neither option counts toward IDR forgiveness or PSLF. Borrowers who stay in forbearance for extended periods often see their balances grow substantially. By contrast, a $0 payment on an income-driven plan still counts toward forgiveness — an important distinction for borrowers weighing forbearance against IDR enrollment.
Starting July 1, 2027, new borrowers will face tighter restrictions: no economic hardship or unemployment deferments, and forbearance capped at 9 months in any 24-month period. These limits apply only to borrowers who take out their first loans after that date.
How to Choose a Repayment Plan
The right plan depends on what you’re optimizing for — total cost, monthly affordability, or forgiveness.
If your goal is to pay the least total cost, the Standard Repayment Plan wins. You’ll pay the highest monthly amount, but you’ll be done in 10 years with the least interest.
If you need the lowest possible monthly payment, an income-driven plan is the path. IBR can produce $0 payments for borrowers whose income falls below the threshold. RAP has a $10 minimum, but its interest waiver prevents your balance from growing while you’re in a low payment — IBR does not offer that protection.
If you’re pursuing Public Service Loan Forgiveness, you want the qualifying IDR plan that produces the lowest monthly payment. Every dollar you pay on an IDR plan while working toward PSLF is a dollar that would have been forgiven. IBR and RAP both qualify for PSLF. The IBR vs. RAP and PAYE vs. RAP comparisons show which plan produces the lower payment for your income and family size.
Related:
If you were on SAVE, your servicer sends a notice giving you 90 days to choose a new plan. Notices began going out July 1, 2026. Your likely options are IBR, if all your loans were made before July 1, 2026, or RAP. You don’t have to wait for the notice to switch. The best repayment plan now that SAVE is gone walks through the choice by goal and income.
Related: Is IBR Going Away? What’s Happening to IDR Plans in 2026
If you have Parent PLUS loans, that consolidation deadline has passed. A Direct Consolidation Loan had to be disbursed on or before June 30, 2026 to reach an income-driven plan. Parent PLUS loans that weren’t consolidated in time can’t enroll in an income-driven plan now, and consolidating today moves them onto the Tiered Standard plan — a fixed payment with no income-driven forgiveness behind it.
Related:
How to Switch Your Repayment Plan
Contact your federal loan servicer to change your repayment plan. If every loan you hold was made before July 1, 2026, you can switch to any plan you qualify for at any time (34 CFR § 685.210(b)(1)). If you’ve borrowed since then — a new federal loan or a new consolidation — your menu narrows to the Repayment Assistance Plan and the Tiered Standard plan, and you can move between those two freely (§ 685.210(b)(5)). If you don’t know who your servicer is, log in to StudentAid.gov and check under “My Aid.”
To switch to a fixed-payment plan (Standard, Graduated, Extended, or Tiered Standard), request it. No income documentation required.
To switch to an income-driven plan (IBR, RAP, ICR, or PAYE), you’ll complete the IDR application on StudentAid.gov. The application asks you to provide income information — the fastest method is the IRS Data Retrieval Tool, which pulls your AGI from your most recent tax return. Have your latest tax return or pay stubs available in case manual entry is needed.
Processing times vary by servicer. During high-volume periods — like the July 2026 SAVE transition — expect delays. Applying early gives you a buffer.
Related:
FAQs
What is Trump's new student loan repayment plan?
The One Big Beautiful Bill Act, signed July 4, 2025, creates two new plans. The Repayment Assistance Plan is a new income-driven plan that calculates payments as 1–10% of AGI and offers forgiveness after 30 years. The Tiered Standard Plan is a fixed-payment plan with 10, 15, 20, or 25-year terms based on your balance. Both launched July 1, 2026.
Which student loan repayment plans are going away?
SAVE was vacated by court order on March 10, 2026. PAYE and ICR are closed to loans made on or after July 1, 2026. Borrowers with only older Direct Loans can still apply until July 1, 2027, according to the Department of Education, and both plans end June 30, 2028. Graduated and Extended repayment are no longer available for loans disbursed after July 1, 2026. IBR and Standard Repayment remain permanently available to legacy borrowers.
What happens if I was on the SAVE plan?
Your servicer sends a notice giving you 90 days to pick a new plan. If you don't choose within the window, you're placed in Standard Repayment or the Tiered Standard Plan. You can switch to IBR or RAP now without waiting for the notice.
Is IBR going away?
No. IBR is the only legacy income-driven plan that survives permanently. It remains available to all borrowers with Direct Loans disbursed before July 1, 2026.
What is the Tiered Standard Plan?
A new fixed-payment plan created by the OBBBA, available since July 1, 2026. Unlike the traditional 10-year Standard plan, the Tiered Standard adjusts its repayment term — 10, 15, 20, or 25 years — based on your total outstanding balance. It's not income-driven, offers no forgiveness timeline, and is one of the default auto-enrollment options for SAVE borrowers who don't choose a plan.
Are Graduated and Extended repayment going away?
For existing borrowers, no — if you're already on Graduated or Extended, your plan continues. But neither plan is available for loans first disbursed on or after July 1, 2026. New borrowers after that date choose between Tiered Standard and RAP.
Which repayment plan will you be placed on automatically unless you apply for a different plan?
For a federal Direct Loan made on or after July 1, 2026, it's the Tiered Standard Plan. If you don't choose a plan, those loans are placed on Tiered Standard, with fixed payments over 10, 15, 20, or 25 years depending on your total Direct Loan balance when you enter repayment (34 CFR 685.210(a)(2)(ii)). That's the answer for anyone completing entrance counseling for a new loan now. Older loans follow the pre-2026 rule: Direct Loans made before July 1, 2026 default to the Standard Repayment Plan, which is 10 years of fixed payments, or a balance-based term for a consolidation loan (34 CFR 685.210(a)(2)(i)). That only holds if you haven't received a new Direct Loan since July 1, 2026. Once you have, your loans generally must be repaid under the same plan and the old Standard plan is no longer available to you, so the default becomes Tiered Standard. Either way, you stay on the default plan until you apply for a different one. This rule covers loans entering repayment for the first time. It is not the rule for borrowers leaving SAVE, or for PAYE and ICR borrowers in 2028.
