Which federal student loan repayment plans can you still choose after July 1, 2026?
Summary
It depends on when your loans were first disbursed. One Direct Loan first disbursed on or after July 1, 2026, including a new consolidation loan, limits all of your Direct Loans to the Repayment Assistance Plan (RAP) and the Tiered Standard Plan. Borrowers whose loans are all older can still use IBR, PAYE, and ICR, but PAYE and ICR end no later than July 1, 2028, and Parent PLUS loans cannot go on RAP at all.
One new loan decides it
The line is the first disbursement date. Take out a single new loan on or after July 1, 2026, or consolidate into a new Direct Consolidation Loan after that date, and you lose IBR, PAYE, and ICR for every Direct Loan you hold, old ones included. From then on your choices are RAP, which sets the payment by income, and the Tiered Standard Plan, which sets it by balance.
If you do not pick a plan, a loan disbursed on or after July 1, 2026 goes into the Tiered Standard Plan when repayment starts.
FFEL and Perkins loans are not allowed on RAP or Tiered Standard. A borrower with a mix repays the Direct Loans under one of the new plans and the others separately under an older plan they qualify for.
How RAP sets the payment
RAP takes a percentage of your adjusted gross income (AGI), divides by 12, and subtracts $50 a month for each dependent on your federal tax return. The percentage climbs with income:
- AGI of $10,000 or less: a flat $120 a year, which works out to the $10 monthly minimum
- More than $10,000 up to $20,000: 1% of AGI
- Each further $10,000 band adds one point, so more than $50,000 up to $60,000 is 5%
- More than $100,000: 10%
The payment never drops below $10. A married borrower filing jointly is generally billed on combined income, reduced if the spouse also has federal student loans. Filing separately leaves the spouse's income out.
When a full payment arrives on time, RAP waives the month's unpaid interest, and if principal fell by less than $50, the department adds a matching payment to make up the difference. A balance left after 360 qualifying payments, over at least 30 years, can be discharged. Outside of Public Service Loan Forgiveness (PSLF), the discharged amount may be taxable at the federal or state level. On-time, full RAP payments generally count toward PSLF.
How the Tiered Standard Plan sets the term
The payment is fixed. The term depends on the Direct Loan principal you owe when you enter the plan: 10 years under $25,000, 15 years from $25,000 to under $50,000, 20 years from $50,000 to under $100,000, and 25 years at $100,000 or more. The payment has to be at least $50 a month. Adding loans later, or leaving and coming back, resets the term to your balance at that point. Tiered Standard payments do not count toward PSLF.
If all your loans are older
| Plan | Payment | Years to discharge | Capped at 10-year Standard payment |
|---|---|---|---|
| RAP | 1% to 10% of AGI, minus $50 per dependent | 30 | No |
| IBR, first borrowed after July 1, 2014 | 10% of discretionary income | 20 | Yes |
| IBR, borrowed before July 1, 2014 | 15% of discretionary income | 25 | Yes |
| PAYE | 10% of discretionary income | 20 | Yes |
| ICR | 20% of discretionary income | 25 | No |
You can move from IBR, PAYE, or ICR to RAP and later move back. RAP payments will not count toward discharge under the older plans, though progress you made under them does count toward RAP's 360 payments. Defaulted loans are not eligible for any income-driven plan.
Parent PLUS and former SAVE borrowers
Parent PLUS loans, and consolidation loans that paid them off, are excluded from RAP. A parent who borrows or consolidates a Parent PLUS loan after July 1, 2026 can use only the Tiered Standard Plan, with no income-driven plan and no PSLF. A consolidation loan disbursed by June 30, 2026 can reach IBR if at least one payment is made under ICR between July 4, 2025 and July 1, 2028.
The SAVE Plan ended in 2026 when a court approved a settlement. Starting July 1, servicers began sending SAVE borrowers notices giving them 90 days to pick another plan. Borrowers who do not choose are placed in the Standard Repayment Plan or the Tiered Standard Plan.
Sources
- Federal Student Aid, studentaid.gov/manage-loans/repayment/plans
- Federal Student Aid, studentaid.gov/manage-loans/repayment/plans/income-driven
- Federal Student Aid, studentaid.gov/announcements-events/big-updates/definitions
- Federal Student Aid, studentaid.gov/understand-aid/types/loans/plus/parent
- U.S. Department of Education, ed.gov/about/news/press-release/fact-sheet-trump-administration-simplifying-st…
- U.S. Department of Education, ed.gov/about/news/press-release/us-department-of-education-announces-next-step…
Written by Kaz (pen name). Figures are copied from the sources' published pages on the dates shown. We have not used these products. Corrections: contact form.