Student Loan Repayment Changed in 2026: What New Borrowers Get

You took out your first federal student loan this fall, or you already have loans and just borrowed again, and the repayment plans you read about online don't match what your servicer shows. If any of your federal Direct Loans was first disbursed on or after July 1, 2026, you'll repay all of your Direct Loans under one of two plans: the income-based Repayment Assistance Plan (RAP) or the fixed-payment Tiered Standard Plan.

That rule comes from the 2025 law known as the One Big Beautiful Bill Act (the Department of Education's newer guidance also calls it the Working Families Tax Cuts Act). Every rule and figure below was checked on November 10, 2026, on StudentAid.gov and the Department's FSA Partner Connect site.

What Changed on July 1, 2026

The law was signed on July 4, 2025, and the Department published its final rule on most loan provisions on May 1, 2026. According to StudentAid.gov's One Big Beautiful Bill Act updates page, the main changes for students who borrow now are:

• Two new repayment plans, RAP and the Tiered Standard Plan, for anyone with a loan first disbursed on or after July 1, 2026.
• Fewer choices for those borrowers. The older Standard, Graduated and Extended plans, and the Income-Based Repayment (IBR), Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE) plans, are not available to them.
• New borrowing limits for parents, graduate students and professional students, plus a lifetime cap. Undergraduate limits didn't change.

The date that matters is when a loan was first disbursed (paid out), not when you applied or started school. You can see each loan's disbursement date on your StudentAid.gov dashboard.

Find Your Situation: Which Plans You Can Use

This table summarizes what StudentAid.gov's borrower scenarios and the Department's Income-Driven Repayment Plan Request form say about each case.

If you don't pick a plan when your loans enter repayment, StudentAid.gov says your servicer will place all of your loans in the Tiered Standard Plan once you have a loan from on or after July 1, 2026.

How the Repayment Assistance Plan Works

RAP is the new income-driven plan. StudentAid.gov's definitions page explains the formula: your payment is a percentage of your adjusted gross income (AGI), divided by 12, then reduced by $50 for each dependent you claim on your federal tax return. The payment is never less than $10 a month. Your loan balance doesn't change the formula.

Two quick examples using that formula:

• AGI of $30,000, no dependents: 2% of $30,000 is $600 a year, or $50 a month.
• AGI of $45,000, one dependent: 4% of $45,000 is $1,800 a year, or $150 a month, minus $50 for the dependent, so $100 a month.

If you're married and file a joint return, the payment is generally based on your combined income, with a reduction if your spouse also has federal student loans.

Three features make RAP different from the older income-driven plans:

1. Unpaid interest is covered. If your full, on-time payment doesn't cover the interest that accrued that month, the Department subsidizes the rest, for as long as you stay in the plan. If you keep paying on time without breaks, your balance shouldn't grow above what it was when you entered RAP.
2. Your principal goes down at least a little. If an on-time payment reduces your principal by less than $50, the Department adds a matching payment so principal drops by $50 that month (or by the amount you paid, if your payment is under $50).
3. Forgiveness takes longer. Any remaining balance may be discharged after 360 qualifying monthly payments over at least 30 years, and the discharged amount may be taxable. RAP payments made on time and in full can count toward Public Service Loan Forgiveness (PSLF).

You recertify your income every year. The Department's request form notes that if you miss the deadline, your payment may rise to what you'd pay on a 10-year schedule.

How the Tiered Standard Plan Works

The Tiered Standard Plan has a fixed monthly payment, at least $50, set so your loans are paid off within a maximum period based on your total Direct Loan principal when you enter the plan:

If you add loans later, or leave the plan and return, the period is recalculated on your new total. Payments under this plan don't count toward PSLF, so if you work or plan to work in public service, RAP is the plan that keeps that option open.

The trade-off: the Tiered Standard payment is predictable and pays off the debt by a set date, while a RAP payment follows your income, which can help if your earnings are low or uneven. Which costs less overall depends on your income, family and balance, so run both through the Department's Repayment Calculator with your actual loans.

Which Older Plans Are Closing

• SAVE: StudentAid.gov's SAVE Plan FAQ says a court order ended the plan in March 2026. Servicers began sending 90-day notices on July 1, 2026, and StudentAid.gov says every SAVE borrower will be notified before the end of 2026.
• ICR and PAYE: Both end no later than July 1, 2028, and borrowers on them must move to another plan by then.
• IBR: Stays open for loans disbursed before July 1, 2026, as long as you don't receive a new loan. The law also removed IBR's "partial financial hardship" requirement, which the Department says it put into effect on December 22, 2025.
• Graduated and Extended: Still available only to borrowers with no loans disbursed on or after July 1, 2026.

If You Already Have Loans and Borrow Again

This is the case that surprises people most. Say you finished an associate degree on IBR and borrow again this year for a bachelor's. While the new loan is in an in-school deferment, your older loans can stay on IBR. But when the new loan enters repayment, StudentAid.gov says all of your Direct Loans, old and new, must be repaid under RAP or the Tiered Standard Plan, and you lose access to IBR, ICR and PAYE even if you were enrolled in one.

A few details help you plan:

• Progress can carry over to RAP. Qualifying payments you made under an earlier income-driven plan count toward RAP's discharge, but the period becomes 30 years. Someone on a 20-year plan who switches would need more years of payments.
• Consolidating counts as borrowing. A Direct Consolidation Loan made on or after July 1, 2026, is a new loan for these rules.
• You can borrow less. You can accept part of a loan offer or decline it. If a small new loan would move all your existing debt off a plan that suits you, compare the numbers in the Repayment Calculator before you accept it.

The New Borrowing Limits, Briefly

Undergraduate limits for Direct Subsidized and Unsubsidized Loans did not change. The rest did, for anyone who doesn't qualify for the interim exception described below. These figures come from StudentAid.gov's definitions page and the Department's loan limits FAQ for schools:

Two more rules matter for adult and online students. If you enroll less than full time, your annual limit is reduced in proportion to your enrollment for loan periods that begin on or after July 1, 2026. And your school can set a lower limit for a program as long as it applies it to everyone in that program.

The interim exception. If you were enrolled in a program on June 30, 2026, and had received a Direct Loan for that program before July 1, 2026, you keep the old limits (including access to grad PLUS) for the lesser of three academic years or the time left in your program, as long as you stay in the same program at the same school. Graduate students will find the full funding picture in a separate CollegeHub guide on paying for a master's degree.

Before You Borrow, Compare What Schools Charge

Under either new plan, every dollar you don't borrow is a dollar you don't repay. For independent undergraduates, the federal annual limit is $9,500 in the first year, $10,500 in the second and $12,500 from the third year on. Comparing that with a school's tuition shows how much you might need to cover with grants, savings or work.

In the CollegeHub directory, 13 of the 18 schools publish an annual tuition range, and 5 list tuition as varying by program. Four have a published range that starts at or below $12,500: Colorado State University Global ($8,400 to $10,500), Purdue Global ($10,000 to $17,000), Liberty University ($11,000 to $23,000) and The University of Arizona Global Campus ($12,000 to $18,000). These are tuition ranges only, before fees, books, Pell Grants or scholarships, and the price of your program can sit anywhere in the range, so ask each school for a program-specific figure.

All 18 schools in the directory note that financial aid is available. Once you have an offer, our guide on how to read a financial aid letter shows how to separate grants from loans, and what goes into the price of online college covers the costs beyond tuition.

What To Do Now

1. Check your loans. Log in to StudentAid.gov and note each loan's type and first disbursement date.
2. Run the numbers before accepting a new loan. If you're on IBR, PAYE or ICR, a new loan will eventually move all your loans to RAP or the Tiered Standard Plan.
3. Borrow only what you need. You can accept less than your offer, and the new limits make every federal dollar count.
4. Watch for your servicer's notice if you were on SAVE. Your 90-day window starts when the servicer contacts you, not when you get an email from Federal Student Aid.
5. Choose RAP if you're counting on PSLF. Tiered Standard payments don't qualify.
6. Recertify every year on RAP so your payment stays tied to your income.

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Trying to borrow less for your degree? Compare tuition, start dates and accreditation for accredited online schools in the CollegeHub directory.

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