Part 4—Federal Student Loan Repayment Plans Are Getting a Major Overhaul

These updates will affect:

• Loan repayment options

• Deferment and forbearance policies

• Loan rehabilitation options

• Public Service Loan Forgiveness (PSLF)

• Loan servicing

Because there is so much to cover, we are breaking this into several focused blogs. First up: changes to repayment options.

If you have ever tried to navigate the maze of federal student loan repayment plans, you know how confusing it can be. The new legislation aims to change that—by wiping the slate clean.

Let’s start with what is going away.

Out with the Old: Repayment Plans Being Eliminated

Starting July 1, 2026, the following repayment plans will be phased out for new borrowers:

• SAVE Plan (Saving on a Valuable Education)

• PAYE (Pay As You Earn)

• REPAYE (Revised Pay As You Earn)

• IBR (Income-Based Repayment)

• ICR (Income-Contingent Repayment)

Each plan has different eligibility requirements, payment calculations, and forgiveness timelines. Many borrowers find themselves overwhelmed by the choices or stuck in plans that don't serve their best interests.

In with the New: Two Simple Options

The new system offers just two repayment choices:

• Standard Repayment Plan

  • Fixed monthly payments

  • 10–25 year terms depending on how much you borrowed

• Repayment Assistance Plan (RAP)

  • Income-based payments

  • Forgiveness after 30 years

  • Designed to be simpler and more predictable

Who This Affects

• New borrowers after July 1, 2026: You will only have access to the new plans.

• Current borrowers: You can stay on your existing plan (except ICR, which is being phased out), or switch to RAP if you prefer.

Why This Matters

This is a massive simplification of the repayment system. It is designed to:

• Reduce confusion

• Make repayment more predictable

• Prevent borrowers from getting stuck in the wrong plan

But it also means less flexibility—and for some, longer repayment timelines.

What You Should Do Now

If You Are a Current Borrower:

• Review your current repayment plan and monthly payment

• Calculate what you might pay under the new options

• Consider your long-term financial goals and career plans

• Do not panic–you have time to make informed decisions

If You Are Planning to Borrow:

• Understand the new landscape before taking loans

• Factor repayment options and loan limits into your borrowing decisions

• Consider the total cost of education under different repayment scenarios

In the next blog, we will dive into the details of the new Repayment Assistance Plan and how it reshapes how borrowers repay loans.

Not sure how these new repayment plans will affect your student loan strategy? Let’s break it down together. Whether you are a current borrower or planning ahead, InfoQuest can help you understand your options and make a plan that works for your future. Reach out today.