The federal student loan repayment landscape changed significantly in 2026. The SAVE plan ended through a court-approved settlement: on March 9, 2026 the Eighth Circuit ordered the settlement between the Education Department and the challenging states entered as final judgment, and the district court did so on March 10. About 7 million borrowers were left in interest-free forbearance, and those months do not count toward forgiveness or PSLF. The Repayment Assistance Plan (RAP) opened July 1, 2026. SAVE borrowers are being moved out in waves: each gets a 90-day notice from their servicer, the Department said no one had to leave SAVE before September 29, 2026, and anyone who does not pick a plan by their deadline is placed in the Standard Plan, which may cost far more per month than an income-driven plan. Here is every plan explained, with exact payment examples, and how to decide which one fits your situation.
| Plan | Term | Payment | PSLF |
|---|---|---|---|
| Standard | 10 yr | Fixed | Yes |
| Graduated | 10 yr | Rises every 2 years | No |
| Extended | 25 yr | Fixed or graduated | No |
| IBR (new) | 20 yr | 10% of disc. income | Yes |
| IBR (old) | 25 yr | 15% of disc. income | Yes |
| PAYE | 20 yr | 10% of disc. income | Yes |
| RAP | 30 yr | 1–10% of AGI | Yes |
| Tiered Standard | 10–25 yr | Fixed | 10-yr tier only |
Income-driven plans (IBR, PAYE, RAP) forgive any balance left at the end of the term; Standard, Graduated, Extended and Tiered Standard pay the loan off. "Disc. income" is discretionary income, your AGI minus 150% of the poverty guideline. The plans on the list depend on when you borrowed. If you take out any new federal loan on or after July 1, 2026, your choices for all your Direct Loans narrow to two: RAP or the new Tiered Standard Plan, whose term depends on your balance (10 years under $25,000; 15 years for $25,000–$49,999; 20 years for $50,000–$99,999; 25 years at $100,000 or more). If all your loans predate July 2026, you keep access to IBR, and PAYE and ICR remain open until July 1, 2028, when borrowers still on them must move.
The Standard Plan divides your balance into 120 equal monthly payments over 10 years. No income verification, no annual recertification, no complexity. You pay the same amount every month for 10 years and the loan is gone.
It minimizes total interest paid because you eliminate principal faster. Here is the cost comparison at the 2026–27 undergraduate rate of 6.52%, computed with the standard amortization formula:
| Loan | 10-yr monthly | 25-yr monthly | Extra interest |
|---|---|---|---|
| $25,000 | $284 | $169 | +$16,639 |
| $40,000 | $455 | $271 | +$26,623 |
| $60,000 | $682 | $406 | +$39,934 |
On a $60,000 balance, stretching to 25 years lowers the payment by $276 a month but raises the total repaid from $81,828 to $121,762, about $39,900 more in interest. Extended repayment also requires more than $30,000 in Direct Loans. If you can manage the standard payment without financial stress, it almost always wins financially.
One important note about PSLF: 10-year Standard payments count as qualifying payments, but after 120 of them the loan is already paid off, so there is nothing left to forgive. PSLF only saves money when you are on an income-driven plan (IBR or RAP) whose payment is lower than the Standard amount. If you are aiming for PSLF, pick the income-driven plan and do not pay extra.
Graduated payments start lower and increase every two years, completing repayment in 10 years. Designed for borrowers who expect their income to grow significantly in the early years. Total interest paid is higher than the Standard Plan because early payments are smaller and more interest accumulates, but the graduated structure can ease cash flow pressure in the first few years post-graduation.
Graduated payments do not count toward PSLF, so it is only for borrowers who are certain their income will increase substantially and who are not pursuing PSLF. If your income growth is uncertain, the Standard Plan's predictability is easier to budget around.
IBR caps your monthly payment based on your income and family size. For new borrowers (after July 1, 2014), the cap is 10% of discretionary income. For older loans, it is 15%. Discretionary income is roughly your adjusted gross income minus 150% of the federal poverty guideline for your family size.
What this means in practice: if your income is low enough, your IBR payment can be very low — potentially zero. Your loan does not default just because you pay $0; you remain in good standing. Interest continues to accrue, but IBR's interest protections prevent your balance from growing in many cases.
The trade-off: the loan term extends to 20 or 25 years, and any remaining balance at the end is forgiven. The temporary federal tax exclusion for income-driven forgiveness expired after December 31, 2025, so forgiveness at the end of IBR, PAYE or RAP is generally taxable federal income again (PSLF forgiveness stays tax-free). For borrowers with high debt-to-income ratios, IBR often provides necessary financial breathing room.
IBR is the most flexible income-driven option for most borrowers and the most common plan for PSLF candidates. You must recertify your income annually — missing recertification is the most common IBR mistake and can cause your payment to spike suddenly.
PAYE caps payments at 10% of discretionary income (same as new-borrower IBR) with a 20-year forgiveness timeline. To qualify, you must be a new borrower as of October 1, 2007 with a Direct Loan disbursed after October 1, 2011, and your payment under PAYE must be lower than your Standard Plan payment.
For borrowers who first borrowed after July 1, 2014, PAYE and IBR work almost the same way: 10% of discretionary income, 20 years to forgiveness, payment capped at the 10-year Standard amount. PAYE's edge is for borrowers with older loans, who are stuck with the 15% / 25-year version of IBR. PAYE is scheduled to close on July 1, 2028, so anyone on it today will have to move to IBR or RAP by then.
The Repayment Assistance Plan (RAP) replaces SAVE as of July 1, 2026. Here are the key features and what they mean practically:
For borrowers who previously had very low or $0 SAVE payments, RAP's $10 minimum is a concrete change. For most borrowers with moderate incomes, the practical effect depends on whether the AGI-based calculation produces a higher or lower payment than their old discretionary income calculation. Use the Federal Student Aid loan simulator at studentaid.gov before switching plans.
The table uses the 2026 federal poverty guideline ($15,960 for one person, plus $5,680 per extra household member). IBR here is the new-borrower version: 10% of income above 150% of that guideline. RAP uses the brackets above. Payments are monthly, before IBR's Standard-payment cap.
| AGI | Household | IBR (10%) | RAP |
|---|---|---|---|
| $30,000 | Single | $50.50 | $50.00 |
| $30,000 | 1 child | $0 | $10.00 |
| $50,000 | Single | $217.17 | $166.67 |
| $50,000 | 1 child | $146.17 | $116.67 |
| $75,000 | Single | $425.50 | $437.50 |
| $75,000 | 1 child | $354.50 | $387.50 |
How the $50,000 single row is built: IBR = ($50,000 − 1.5 × $15,960) × 10% ÷ 12 = $217.17. RAP = $50,000 × 4% ÷ 12 = $166.67. For a single borrower, working through every bracket the same way shows RAP is cheaper from about $34,000 to $70,000 of AGI, while new-borrower IBR is cheaper below about $34,000 (it can reach $0) and above about $70,000. IBR also stops rising once it hits the 10-year Standard payment, and RAP has no such ceiling. Borrowers on the older 15% IBR pay 1.5 times the IBR column, so for a single borrower RAP is cheaper at all three incomes. Confirm your own numbers in the studentaid.gov Loan Simulator before switching.
Public Service Loan Forgiveness forgives your entire remaining federal Direct Loan balance after 120 qualifying payments (10 years) while working full-time for a government or qualifying nonprofit employer. The forgiven balance is currently tax-free, and there is no dollar cap on forgiveness.
To qualify, every element must be in place simultaneously:
Submit the PSLF Form annually, not just at year 10. Annual submission identifies problems while you still have time to fix them. Borrowers who wait until year 10 to submit sometimes discover years of payments did not qualify — a preventable and costly mistake.
For teachers, nurses, social workers, government employees, and nonprofit workers with significant loan balances, PSLF can mean six-figure forgiveness. It fundamentally changes the repayment math and should inform your plan choice from the first payment.
The decision comes down to three factors: your income relative to your debt, your employer type, and your timeline.
Calculate monthly payments and total interest cost for your specific loan amount and income.
Loan Repayment Calculator →Is RAP better than the old IBR? It depends on your income and household. At $50,000 AGI a single borrower pays $166.67 a month on RAP versus $217.17 on new-borrower IBR, but at $75,000 RAP is higher ($437.50 vs $425.50), and at very low incomes IBR can be $0 while RAP is at least $10. RAP's forgiveness takes 30 years versus 20 on new-borrower IBR. Run both scenarios through the studentaid.gov Loan Simulator before choosing.
Is PAYE still available in 2026? Only for existing borrowers who took out all their loans before July 1, 2026 and don't take out new federal loans afterward — and only until PAYE is phased out on July 1, 2028. New borrowers after July 1, 2026 can't enroll in PAYE and are limited to RAP or the Standard Plan.
What happened to the SAVE plan? SAVE ended through a court-approved settlement: the Eighth Circuit ordered it entered as final judgment on March 9, 2026, and the district court signed it on March 10. SAVE borrowers sit in interest-free forbearance that does not count toward forgiveness or PSLF. Servicers are sending 90-day notices in waves (no one had to leave before September 29, 2026); if you do not choose IBR, RAP or another plan by your deadline, you are placed in the Standard Plan. You can switch now at studentaid.gov without waiting for the notice.
Does RAP have a payment cap like IBR does? No — IBR caps your monthly payment at what you'd pay under the 10-year Standard Repayment Plan, no matter how high your income climbs. RAP has no equivalent ceiling; it's a straight percentage of your AGI, so a higher-income borrower with a relatively small remaining balance can end up paying more under RAP than under IBR, or even Standard repayment itself.
If I switch from RAP to IBR, do my RAP payments still count toward forgiveness? Not for IBR's forgiveness clock — this is a one-way street. Switching from IBR into RAP carries your prior payment count over, but switching out of RAP into IBR (or another IDR plan) does not carry RAP payments forward. RAP payments do still count toward PSLF's 120-payment count regardless of later plan switches.
Loan Repayment Calculator — compare monthly payments and total cost across plans.
Student Loan Calculator — total interest cost over the life of your loan.
Student Loan vs Salary Calculator — is your debt load manageable on your income?
Federal vs Private Student Loans — why federal loans come first.
How Much Student Loan Debt Is Too Much? — the 1x salary rule explained.
How to Lower Your Student Loan Payments — all your options ranked by impact.