Major changes to federal student loan repayment are coming, and millions of borrowers need to act before they lose access to key options.
The Trump administration is giving student loan borrowers a 90-day window, starting July 1, 2026, to exit the SAVE plan and find a new repayment option. The Education Department said it would send guidance to the 7.5 million people enrolled in the now-defunct repayment plan.
So what are the options? Beginning July 1, 2026, new borrowers will have two repayment choices: the Standard Repayment Plan, which involves fixed payments over 10 years, and the new Repayment Assistance Plan (RAP), which was created under the One Big Beautiful Bill Act and will be the only income-driven repayment plan available on new loans.
Here is where it gets important for existing borrowers. The old Income-Based Repayment (IBR) plan will only be available to those who finished borrowing before July 1, 2026. All other borrowers will be limited to RAP. While both plans offer student loan forgiveness, RAP requires 30 years in repayment before a loan is eligible for discharge, compared to 20 or 25 years under IBR.
There is another major catch that borrowers should understand before making a move. Payments made under RAP do not count toward the IBR forgiveness clock. A borrower can switch back from RAP to IBR, but those RAP months will not count toward IBR forgiveness. However, time spent in IBR does count toward RAP’s forgiveness clock.
Experts are weighing in on which plan is better. Higher education expert Mark Kantrowitz says most borrowers will be better off in IBR than in RAP, since loan forgiveness can come in 20 years under IBR compared to 30 years under RAP. While some borrowers may have a smaller monthly payment under RAP, they will pay more over the life of the loan.
The bottom line is straightforward. Borrowers who take no action will be automatically enrolled in either the existing Standard Repayment Plan or the new Tiered Standard Plan. Neither of those may be the best fit for your situation, so taking the time now to review your options is well worth it.
