Student Loan Repayment Plans Explained: Standard, IBR, RAP (2026)

The federal student loan repayment landscape changed significantly in 2026. The SAVE plan is gone, replaced by RAP starting July 1, 2026. Here's what each plan means for your wallet.

The main repayment options

Plan	Term	Payment basis	Forgiveness
Standard	10 years	Fixed	None
Extended	25 years	Fixed or graduated	None
IBR (Income-Based)	20–25 years	10–15% discretionary income	After 20–25 years
PAYE	20 years	10% discretionary income	After 20 years
RAP (new July 2026)	30 years	1–10% of AGI (tiered)	After 30 years

What is RAP? (Repayment Assistance Plan)

RAP replaces the SAVE plan starting July 1, 2026 for new borrowers. Key differences from SAVE:

• Minimum payment is $10/month (no more $0 payments)
• Payments based on tiered percentage of full AGI (1–10%), not discretionary income
• Forgiveness after 30 years (longer than SAVE's 20–25)
• Keeps SAVE's interest subsidy — unpaid interest doesn't capitalize

Standard plan: usually the best financial choice

If you can afford the standard 10-year payment, it minimizes total interest paid. For a $35,000 loan at 6.39%, the standard plan costs about $50,000 total vs $65,000+ on an extended plan.

Income-driven plans: when they make sense

IDR plans make sense when your payment-to-income ratio is high — typically when debt exceeds your salary. They also make sense if you're pursuing PSLF (Public Service Loan Forgiveness), where forgiveness comes after 10 years of qualifying payments.

PSLF: the hidden goldmine

If you work for a government or nonprofit employer, PSLF forgives your remaining balance after 120 qualifying payments (10 years). For borrowers with high debt and moderate income, this can mean six-figure forgiveness. Submit your employer certification form every year — don't wait until year 10.