Direct Loan Repayment Updates
We encourage any borrower who is currently in repayment of their federal loans to contact their loan servicer and discuss how these changes may impact their situation. This website provides a high-level overview and there may be other details a current borrower in repayment will want to consider before deciding on how to proceed.
OBBBA eliminates the existing Income Driven Repayment (IDR) plans and replaces them with a new Repayment Assistance Plan (RAP). Existing borrowers on an Income Based Repayment (IBR) plan may remain on their plan. Borrowers on all other IDR plans must apply for IBR by July 1st, 2028. Otherwise they will be moved to the new RAP program. New borrowers whose first loan was borrowed on or after July 1st, 2026 cannot apply for any of the IDR plans, and must choose between the new standard repayment plan or RAP.
Current Repayment Plans (before July 1st, 2026)
- Fixed-Term Plans:
- Standard Repayment
- Graduated Repayment
- Extended Repayment
- Income Sensitive Repayment
- Income-Driven Plans (IDR):
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)
- Saving on a Valuable Education (SAVE)
- Replaced Revised Pay As You Earn (REPAYE)
- Income-Contingent Repayment (ICR)
Changes Effective July 1st, 2026
First Loan Borrowed on or after July 1st, 2026
-
New Standard Repayment Plan:
- Four Fixed-Terms:
- 10 years: balances <$25,000
- 15 years: balances between $25,000–$49,999
- 20 years: balances between $50,000–$99,999
- 25 years: balances $100,000+
- Only 10-year plans qualify for Public Service Loan Forgiveness (PSLF). Note: PSLF requires at least 10 years of repayment.
- Four Fixed-Terms:
Student borrowers who do not select a plan will be placed into the Standard Plan.
-
New Income-Based Repayment Assistance Plan (RAP):
- Monthly payment: 1%–10% of Adjusted Gross Income (AGI)
- $10 minimum payment
- $50 deduction per dependent
- 30-year repayment term; forgiveness after 30 years
- No negative amortization (balances won't grow when payments don't cover interest)
- Payments count toward PSLF
| RAP INCOME GRID | |
|---|---|
| Borrowers' AGI | Monthly Payment |
| Less than $10,000 | $10/month |
| $10,000 - $19,999 | 1% of monthly AGI |
| $20,000 - $29,999 | 2% of monthly AGI |
| $30,000 - $39,999 | 3% of monthly AGI |
| $40,000 - $49,999 | 4% of monthly AGI |
| $50,000 - $59,999 | 5% of monthly AGI |
| $60,000 - $69,999 | 6% of monthly AGI |
| $70,000 - $79,999 | 7% of monthly AGI |
| $80,000 - $89,999 | 8% of monthly AGI |
| $90,000 - $99,999 | 9% of monthly AGI |
| $100,000+ | 10% of monthly AGI |
Current Borrowers
IBR borrowers may remain in their plan. All other non-Parent PLUS IDR borrowers must choose a new plan by July 1, 2028 or be moved to RAP. Parent PLUS loan borrowers will be moved to the new Standard Plan after July 1st, 2028 unless they consolidate and enroll in an IDR before July 1, 2026. Doing so means they can remain in IBR for the duration of the repayment period.
