It would be hard to blame student loan borrowers for stumbling into 2026 like dazed freshmen on their first day on campus.
A dizzying parade of changes has upended the federal student loan landscape over the past half-decade, beginning with the pandemic and perhaps reaching peak perplexity last year with the One Big Beautiful Bill Act and the pending elimination of a popular repayment plan. And this parade has been a lurching, stop-and-go affair full of U-turns and dead ends.
Payment pauses, restarts, court rulings and other updates have resulted in uncertainty and fatigue among borrowers, according to those in the industry. Understanding the various repayment plans and how they’re about to change is one of the biggest challenges.
“For a typical borrower in repayment, it’s incredibly complicated,” says Stacey MacPhetres, senior director of education finance at EdAssist by Bright Horizons. “I think it requires a person to stay really on top of everything to even navigate the changes.”
The One Big Beautiful Bill Act, signed into law in July, may ultimately simplify things by paring down the number of repayment plans available. But that process will take time, and it will likely lead to higher monthly payments for many. In the interim, borrowers must sort their way through their repayment options moving forward.
Here’s a look at the changes coming soon to federal loan repayment plans and how those changes may affect you.
[Read: Best Private Student Loans.]
New Borrowers Will Choose From Two Repayment Plans
Student borrowers who take out federal student loans on or after July 1, 2026, will be limited to two repayment plan options. One key factor to note: Any existing borrower who takes out a new loan after this date will be required to move all of their loans into one of the new plans.
Standard Plan
In this new, tiered standard plan, a borrower will pay a fixed rate for a term of between 10 and 25 years, with the length of the payment window depending on the size of the loan taken out. It replaces the current non-income-based options, known as the standard, graduated and extended repayment plans.
Repayment Assistance Plan
The RAP will serve as the lone income-driven repayment plan for new borrowers, ultimately replacing the various repayment options that are being phased out. The plan bases your payments on your income, with a minimum monthly payment of at least $10. The RAP forgives any remaining debt after 30 years, which is longer than the plans it replaces.
However, it introduces some new perks. You can reduce your payment by $50 for each dependent you have. After each month’s payment is made, any leftover unpaid interest (called negative amortization) is waived, ensuring that your debt doesn’t grow. Additionally, if your payment doesn’t reduce your principal by $50, the government contributes a matching payment to help you reduce your principal.
If You Have Existing Student Loans, You May Need to Change Repayment Plans
Student loan advisors say the majority of questions they’re getting are about the changes to existing plans, especially those that determine payments based on income. Part of the confusion arises from the sheer number of different plans borrowers can be on and the fact that many of those options will be terminated soon.
“I do think one thing that both sides of the aisle agreed on was that there were too many plans, and it was actually causing more harm than good because of the confusion,” says Betsy Mayotte, president and founder of The Institute of Student Loan Advisors.
Mayotte says the array of repayment plans stems from various administrations trying to make student loans more affordable for borrowers, so each would introduce a new repayment plan while also keeping the existing plans intact. Here’s what is happening with existing repayment plans:
Income-Contingent Repayment and Pay As You Earn, or PAYE
These two income-driven repayment plans will sunset on July 1, 2028, at which time any existing borrowers on either plan will need to move to another plan such as the RAP. The Income-Contingent Repayment plan provided a popular avenue for parent borrowers to qualify for an income-based plan, as they could consolidate their Parent PLUS loans and become eligible for ICR.
Parents who still want to qualify for income-driven repayment must complete consolidation by July 1, 2026. As of that date, new parent borrowers and existing parent borrowers who haven’t consolidated will no longer qualify for any income-based plan.
Income-Based Repayment
Existing borrowers can remain in a version of this plan moving forward, but it won’t be open to new borrowers as of July 1, 2026. If a borrower takes out any new federal student loan on or after July 1, 2026, their existing loans will also no longer be eligible for the IBR plan and will need to move to either the Repayment Assistance Plan or the new standard plan.
[Read: Best Student Loan Refinance Lenders.]
Saving on a Valuable Education
With faster forgiveness terms and generous payment requirements, the SAVE plan has faced challenges since it was launched by the Biden administration in 2023. Now it’s set to be the first repayment plan to be eliminated.
The July legislation called for SAVE to be ended along with several other plans in 2028, but a December settlement proposal from the Education Department would eliminate the plan much sooner. That settlement is pending court approval.
Mayotte says she expects SAVE to be terminated in the first half of 2026, which would mean its roughly 7 million borrowers would need to move to a new plan.
Due to the legal challenges, SAVE plan borrowers haven’t had to make a payment in months, and many haven’t been, although interest on those loans began accruing again in August. Any payments that are made currently don’t count toward student loan forgiveness.
The uncertainty puts borrowers in a bind.
“Anyone in the SAVE program is in limbo, and it’s not a good limbo to be in,” says Tom O’Hare, holistic college advisor at Get College Going.
When SAVE officially ends, borrowers may struggle to adjust to the return of monthly payments, which will likely be higher than those borrowers expected when they entered into SAVE, says Mayotte.
“They made other financial decisions based on that budget,” says Mayotte. “They took on mortgages, they rented apartments, maybe they had to get a new vehicle, and now that plan is gone and the next-lowest plan they’re going to be able to get is going to be two or three or four times as much as what SAVE was going to be. I have already talked to quite a few borrowers that are in that very situation.”
The Education Department has so far offered few details on how and when SAVE borrowers would be moved to new plans.
Standard, Graduated or Extended
Existing borrowers on any of the three non-income-based repayment plans can retain those plans as long as they don’t take out any new loans.
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This Is How the Federal Student Loan Repayment Plans Are Changing originally appeared on usnews.com