If you were enrolled in the SAVE plan, or simply trying to figure out where to start with federal student loans, the repayment landscape in 2026 looks very different than it did two years ago. The SAVE plan has ended permanently, two other income-driven options are scheduled to retire, and a brand-new plan launched this summer. Understanding which student loan repayment plans are still available, and which one fits your income and goals, is the most important financial move you can make this year.
Why Student Loan Repayment Plans Changed So Much in 2025 and 2026
Your options for federal student loan repayment plans in 2026 have shifted more than at any point in the past decade, driven by years of litigation, legislative changes, and new regulatory actions. The SAVE plan, which enrolled millions of borrowers and offered some of the most favorable terms in the program’s history, was permanently terminated in March 2026 after losing a series of federal court challenges.
At the same time, Congress created a brand-new income-driven option called the Repayment Assistance Plan (RAP), which launched July 1, 2026. Two existing plans, Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR), are scheduled to be retired no later than July 1, 2028.
If your loans were first disbursed before July 1, 2026, you retain access to most of the existing plans. You are not starting from zero; you just need a clear picture of what is open to you now.
Which Student Loan Repayment Plans Are Available to Pre-July 2026 Borrowers
Borrowers whose loans were first disbursed before July 1, 2026 have access to all of the following federal repayment plans, subject to individual eligibility:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan (requires $30,000 or more in outstanding federal loans)
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE) — sunsetting July 2028; still available now
- Income-Contingent Repayment (ICR) — sunsetting July 2028; still available now
- Repayment Assistance Plan (RAP) — new as of July 1, 2026
The one plan not available to you is the Tiered Standard Plan, which is designed exclusively for borrowers with loans first disbursed on or after July 1, 2026. You can switch between any eligible plan at any time, so your decision today is not permanent.
Standard, Graduated, and Extended Plans: The Fixed-Payment Options
These three plans require no income documentation and no annual recertification. Your payment is based on your loan balance and does not change with your income.
Standard Repayment spreads your loans over 10 years with equal monthly payments. It is the default plan, and for borrowers who can afford it, it typically results in the least total interest paid. Graduated Repayment also runs 10 years but starts with lower payments that increase every two years, useful if you expect strong income growth early in your career but currently earn less.
Extended Repayment stretches payments up to 25 years and requires at least $30,000 in outstanding federal loans. Monthly payments are lower, but the total interest cost is significantly higher than Standard.
If you can afford the Standard 10-year payment, it is usually the fastest and cheapest path to paying off your debt. Income-driven plans are not just for borrowers in financial hardship; they are also strategic tools for managing cash flow early in your career when other financial priorities are competing for the same dollars.
Income-Based Repayment (IBR): The Most Widely Recommended Student Loan Repayment Plan for 2026
IBR caps your monthly payment as a percentage of your income and family size, and forgives any remaining balance after either 20 or 25 years depending on when you first borrowed. For most recent graduates, those who first borrowed on or after July 1, 2014, the payment is 10 percent of discretionary income with a 20-year forgiveness timeline. If you first borrowed before that date, the rate is 15 percent with a 25-year forgiveness term.
Your payment under IBR will never exceed what you would pay on the Standard 10-year plan, even if your income grows significantly. That payment cap is one of IBR’s most valuable features and is not shared by the newer RAP plan.
A significant update took effect July 4, 2025: the partial financial hardship requirement was removed from IBR. Previously, you could only enroll in IBR if your IBR payment would be lower than your Standard payment. That rule no longer applies. Any borrower with eligible federal loans can now enroll in IBR regardless of income level. If you were denied IBR for this reason in the past, you can reapply today.
IBR is also one of only two income-driven repayment plans that will remain permanently available after July 2028. For borrowers leaving SAVE who need a reliable long-term option, IBR is currently the most widely recommended plan by financial experts and the Department of Education.
The Repayment Assistance Plan (RAP): The New Student Loan Repayment Option Launched in 2026
RAP was created by the One Big Beautiful Bill Act, signed July 4, 2025, and became available on July 1, 2026. Unlike IBR, which calculates your payment as a percentage of your discretionary income (the income above a federal poverty threshold), RAP bases your payment on a percentage of your total adjusted gross income (AGI).
Payments scale from 1 percent to 10 percent of AGI depending on your income bracket, with a minimum of $10 per month. If you have dependents, $50 per dependent is subtracted from your monthly payment, which can make RAP particularly helpful for borrowers supporting a family on an entry-level salary.
One of RAP’s most distinctive features is its interest waiver: when you make a full, on-time payment, any unpaid interest for that month is waived. That means your balance cannot grow even when your payment is very small. Forgiveness under RAP comes after 360 qualifying payments, which is 30 years, longer than IBR’s 20-year path for most recent graduates.
One important trade-off: RAP does not cap your payment at the Standard 10-year amount. As your income rises, your RAP payment rises with it, without a ceiling. If you expect significant income growth over your career, IBR’s cap provides more protection over the long run.
Payments made under RAP count toward the 120-payment Public Service Loan Forgiveness requirement, the same as any other qualifying income-driven repayment plan.
IBR vs. RAP: Choosing the Right Student Loan Repayment Plan for Your Situation
For most recent graduates, both IBR and RAP will produce low monthly payments in the early years of a career. The decision between them comes down to which features matter most over the long run.
IBR is the stronger choice if you want a payment that will never exceed your Standard 10-year amount; if you expect your income to grow significantly; if you want the shorter 20-year forgiveness timeline (for post-July 2014 borrowers); or if you value a long-established program with a clear track record.
RAP is the stronger choice if your income is very low right now and you want the lowest possible monthly payment; if you have dependents who reduce your minimum under RAP’s $50-per-dependent deduction; if you want interest waiver protection to prevent your balance from growing; or if you are comfortable with the 30-year forgiveness timeline.
Here is how RAP payment rates work by income bracket:
| Annual Income | RAP Payment Rate | Approximate Monthly Payment |
|---|---|---|
| $0 to $10,000 | Flat minimum | $10/month |
| $10,001 to $20,000 | 1% of AGI | $8 to $17/month |
| $20,001 to $30,000 | 2% of AGI | $33 to $50/month |
| $30,001 to $40,000 | 3% of AGI | $75 to $100/month |
| $40,001 to $55,000 | 4% of AGI | $133 to $183/month |
| $55,001 to $70,000 | 5% of AGI | $229 to $292/month |
| $70,001 to $85,000 | 6% of AGI | $350 to $425/month |
| $85,001 to $100,000 | 8% of AGI | $567 to $667/month |
| Over $100,000 | 10% of AGI | $833+/month |
Example: A single borrower earning $55,000 per year with no dependents pays roughly $229 per month under RAP ($55,000 x 5% / 12).
PAYE and ICR: Use Them Now If You Need To, but Plan to Transition Before 2028
Pay As You Earn (PAYE) caps payments at 10 percent of discretionary income and forgives balances after 20 years. Unlike IBR after July 2025, PAYE still requires a partial financial hardship to enroll, and is only available to borrowers who first borrowed after October 1, 2007.
Income-Contingent Repayment (ICR) calculates your payment as either 20 percent of discretionary income or what you would pay on a 12-year fixed plan, whichever is lower. Forgiveness comes after 25 years. ICR is currently the only income-driven option available to Parent PLUS loan borrowers who consolidate into a Direct Consolidation Loan, but that access window closes on July 1, 2026.
Both plans will be retired no later than July 1, 2028. If you are currently enrolled in either, you do not need to act immediately, but plan to transition to IBR or RAP well before that deadline.
How to Switch Your Student Loan Repayment Plan
You can switch between eligible federal repayment plans at any time through your servicer or directly at StudentAid.gov. The process generally takes one to two billing cycles to take effect. You will need your FSA ID login, recent income documentation (most recent tax return or pay stubs), and your current family size.
If you were enrolled in SAVE or in SAVE-related forbearance, the Department of Education is notifying affected borrowers with a 90-day window to choose a new plan. Borrowers who do not choose within that window will be automatically moved to the Standard Repayment Plan or the Tiered Standard Plan. Acting before that deadline keeps you in control of the decision.
The Loan Simulator at StudentAid.gov is a free tool that lets you compare your estimated monthly payment under each eligible plan based on your actual loan balance and income. If you want a second set of eyes on which plan fits your specific numbers, a free RedSky Money coach can help you sort through the details. Book a free Discovery Call.
Final Thoughts
The federal student loan repayment landscape changed significantly in 2025 and 2026, but your options as a pre-July 2026 borrower remain strong. The most important steps are understanding which plans you are eligible for, comparing how each calculates your payment, and choosing an option that works for your income today while giving you flexibility as your career grows.
IBR offers a proven framework with a payment cap and a 20-year forgiveness path for most recent graduates. RAP offers a newer approach with interest waiver protection and low minimum payments but without IBR’s ceiling as income rises. Standard Repayment remains the most direct path to debt freedom if your income supports the full payment.
No matter which plan you choose, you can switch later if your circumstances change. The worst outcome is staying on the wrong plan, or no plan at all, out of confusion or inertia.
Ready to Make Sense of Your Student Loan Options?
Not sure which repayment plan fits your income and loan balance? A free RedSky Money coach can walk through your specific numbers with you, no sales pitch and no catch. Book your free Discovery Call.
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