Student Loans in 2026: The New Repayment Plan and What Changes for You

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Federal student loan repayment changed on July 1, 2026. A new income-based plan opened, borrowing limits shrank for graduate school and parents, and the SAVE Plan is over.

Below: the official numbers, what changed from last year and when a private refinance makes sense.

Quick answer: The new Repayment Assistance Plan (RAP) sets your payment at 1% to 10% of your adjusted gross income, divided by 12, minus $50 per dependent, with a $10 monthly minimum. Any balance left after 360 qualifying payments may be discharged. If you take a new federal loan on or after July 1, 2026, your only plans are RAP and the Tiered Standard Plan. Refinancing with a private lender ends all federal protections.

Updated on September 23, 2026 · Sources: StudentAid.gov, Repayment plans, ed.gov

Key takeaways

RAP is open to Direct Loan borrowers. Parent PLUS loans cannot use it.
Under RAP, full, on-time payments keep your balance from growing, thanks to an interest subsidy and a principal match of up to $50 a month.
SAVE borrowers in forbearance must pick a new plan or be moved by their servicer.
Grad PLUS loans are no longer available to new borrowers outside the interim exception.

Official dates and values for 2026

Item	Official figure	Who it applies to
RAP payment	1%–10% of AGI ÷ 12	Eligible Direct Loans
RAP minimum	$10 a month	All RAP borrowers
Dependent reduction	$50 a month each	Dependents on your tax return
RAP discharge	After 360 qualifying payments	Remaining RAP balance
Tiered Standard term	10, 15, 20 or 25 years	Set by total balance
Autopay rate cut	1% through June 30, 2028	Direct Loans from July 2012

New loan limit	Before	From July 1, 2026
Grad PLUS	Up to cost of attendance	No longer available
Graduate total (unsubsidized)	$138,500 incl. undergrad	$100,000
Parent PLUS per student	No aggregate limit	$20,000 a year; $65,000 total
Lifetime student maximum	No limit	$257,500

Figures as of September 2026, from the StudentAid.gov definitions page. Students who qualify for the interim exception keep the old limits for a limited time.

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Fixed rates for new Direct Loans first disbursed from July 1, 2026, to June 30, 2027, are 6.52% for undergraduates, 8.07% for graduate unsubsidized loans and 9.07% for PLUS loans, according to StudentAid.gov.

What changed vs last year

New law: the One Big Beautiful Bill Act (OBBBA), which the Education Department calls the Working Families Tax Cuts Act, created RAP and the Tiered Standard Plan. Both became available on July 1, 2026.
SAVE ended: a federal court order on March 10, 2026, blocked the SAVE Plan. Borrowers in SAVE forbearance must select a new plan. The Department says servicers give at least 90 days’ notice.
Older plans: IBR, ICR and PAYE stay open for loans taken before July 1, 2026. You lose access once you receive a new loan on or after that date.
Bigger autopay discount: the rate cut went from 0.25% to 1% for eligible Direct Loans, a temporary benefit through June 30, 2028.

How RAP works, in plain terms

Your payment follows your income. An AGI of $30,001 to $40,000 means a payment of about $75 to $100 a month before dependents. Above $100,000, it is at least $833.33.

If your payment does not cover the month’s interest, the unpaid interest is waived. If it cuts your principal by less than $50, the government adds a matching principal payment. Both benefits need a full, on-time payment. Payments under RAP generally count toward Public Service Loan Forgiveness. Payments under the Tiered Standard Plan do not.

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Need room for the payment? Try one of the budgeting apps that help you stop living paycheck to paycheck.

How to apply or switch plans

Log in at StudentAid.gov and open the income-driven repayment application.
Consent to let the Department get your tax data from the IRS. Your plan can then recertify automatically each year.
Compare plans with the official Repayment Calculator before you choose.
Turn on autopay with your servicer to get the 1% rate cut.

When a private refinance makes sense

Refinancing replaces federal loans with a private one. You give up RAP, PSLF, deferment and every federal repayment option. It can make sense only with stable, high income and no plan to use those protections.

SoFi Student Loan Refinance: fixed 3.99%–10.99% APR and variable 5.74%–10.99% APR, with autopay and member discounts, as of September 23, 2026. SoFi charges no origination, prepayment or late fees.
Sallie Mae Smart Option Student Loan: a private loan for school, not a refinance. Fixed 2.08%–17.49% APR and variable 3.75%–16.95% APR, valid as of September 15, 2026, with no origination fee, per Sallie Mae. Use it only after federal loans.

If the problem is other debt, compare debt consolidation loans first. A higher score also lowers private rates. See how to reach an 800 credit score.

How we compared

Checked: every federal figure and each lender’s rates on September 23, 2026, on StudentAid.gov, ed.gov and each lender’s official page.
Order: federal options come first because they carry protections private loans lack. The private lenders are not ranked.
Left out: Earnest, because its official page blocked our access today and we could not confirm current rates.
Independence: no lender paid for placement. Ieveera SEO is not the government and never charges to apply for federal aid.

Not financial advice. Rates and terms checked on September 23, 2026 with each provider’s official page; confirm before applying.

FAQ

Is there an official student loan calculator?

Yes. The free Repayment Calculator on StudentAid.gov estimates your payment under each federal plan.

How is my RAP payment calculated?

Apply your bracket percentage (1% to 10%) to your AGI, divide by 12 and subtract $50 per dependent. The minimum is $10.

Is student loan forgiveness still available in 2026?

Yes, in two main ways. RAP can discharge a remaining balance after 360 qualifying payments, and PSLF still applies. Except for PSLF, a discharged amount may be taxable.

I was on SAVE. What do I do now?

Choose a new plan through StudentAid.gov or your servicer. If you do nothing, your servicer will move you to a different plan.

Should I refinance federal loans to get a lower rate?

Only if you are sure you will never need income-based payments, PSLF or federal relief. A refinance cannot be undone.

For the full picture, see our hub Best Personal Loans 2026 (US), the best personal loans of 2026 and personal loans for bad credit that still offer fair terms.

Sources

Ieveera SEO is an independent publisher, not a bank or financial advisor; content is for information only and may include paid affiliate links that never affect our rankings — always confirm current rates and terms with the provider.