RAP also adds a $50 matching principal payment in each qualifying month.
The trade-off is the term. Moving from PAYE to RAP can extend your repayment period from 20 years to 30, because the discharge period follows the plan you finish on. Borrowers who expect to pay everything off should think hard before switching.
What are the rules for the older income-driven plans?
IBR, ICR, and PAYE still exist for people who borrowed before July 1, 2026, and two of them have a published end date.
The rule that catches people is simple. If you have any Direct Loan first disbursed on or after July 1, 2026, you can repay eligible Direct Loans under RAP or Tiered Standard only.
Taking one new loan removes your access to IBR, ICR, and PAYE for the rest of your repayment.
Borrowers with no post-July-2026 disbursement keep access to Standard, Graduated, Extended, IBR, ICR, PAYE, and RAP, but not to Tiered Standard.
An interim exception covers students who were enrolled on June 30, 2026 and received a loan before July 1, 2026 at the same school for the same credential. Those borrowers keep the older limits for the shorter of three academic years or the rest of the program.
Parent PLUS loans, and consolidations that repaid parent PLUS loans, are limited to Tiered Standard with no income-driven option at all.
Borrowers who want to keep IBR access after ICR ends need to consolidate into a Direct Consolidation Loan and enroll in an income-based plan before July 1, 2028. Our consolidation loan calculator shows how a new loan changes the balance you would consolidate.
Which forgiveness programs do these plans feed?
The plan you choose decides which forgiveness program you can reach, so the order is plan first and program second.
Forgiveness and discharge options in 2026
| Program | Who qualifies | Amount or time | Tax treatment |
|---|
| Public Service Loan Forgiveness | Full-time work at a qualifying employer with Direct Loans | 120 qualifying payments, about 10 years | Not taxed |
| Teacher Loan Forgiveness | Five consecutive full-time years in a low-income elementary or secondary school | Up to $17,500 | May be taxable |
| Income-driven discharge | Borrower who completes the term on an income-driven plan | 20, 25, or 30 years | May be taxable |
| Perkins Teacher Cancellation | Public or nonprofit elementary school, Head Start, or early childhood provider | Percentage of the loan forgiven by year | May be taxable |
| Total and permanent disability | Direct, FFEL, and Perkins borrowers with a qualifying disability | Balance discharged | May be taxable |
| Closed school, borrower defense, false certification, unpaid refund | Borrowers affected by school closure, misconduct, or mis-certification | Balance discharged | May be taxable |
| Death | Direct, FFEL, Perkins, and parent PLUS borrowers | Balance discharged | May be taxable |
Two rules catch people here. Teacher Loan Forgiveness cannot be counted alongside PSLF for the same period, and RAP months count for PSLF but not toward IBR, ICR, or PAYE discharge.
Every discharge except PSLF may be treated as taxable income, and borrowers get 21 days to opt out of a discharge.
The Federal Student Aid forgiveness page lists each program with its full conditions, and the PSLF page covers the qualifying employer question in detail.
What happens if you need more time to pay?
Federal deferment and forbearance are still available, and the SAVE transition shows what can happen when a plan disappears mid-borrowing.
Deferment pauses payments for reasons such as enrollment, military service, or disability, and on subsidized loans the Department pays the interest during the deferment. Forbearance is the looser option that pauses or reduces payments temporarily, usually for financial hardship or unemployment.
When SAVE ended on July 1, 2026, borrowers who did not choose a new plan were moved to a fixed-payment plan automatically, and the transition produced a wave of adjustment. Our SAVE plan deadline guide explains what the transition meant and how to check where your loan sits now.
- Enroll in auto-pay, since the interest rate reduction rose from 0.25% to 1% on July 1, 2026.
- Recertify your income on the schedule your plan requires, because a missed date can move you to a standard payment.
- Keep a copy of every plan change confirmation you receive from the servicer.
- Ask the servicer what payment would cover if your income drops, before the payment date.
How do you choose between a fixed plan and an income-driven plan?
Choose an income-driven plan if you qualify for forgiveness or if your income is unstable, and a fixed plan if you can afford it and want the debt gone early.
Comparing student loan repayment options this way takes one afternoon, and it can save thousands of dollars over the life of the balance.
Run the numbers both ways. A fixed plan on a $50,000 balance at Tiered Standard means 20 years of payments and no forgiveness.
The same balance on RAP with a 10% payment and a $100,000 adjusted gross income means 30 years, but the remaining balance is discharged after 360 qualifying payments if the rules stay in place.
Public service workers should check the arithmetic carefully. Tiered Standard does not count for PSLF, while RAP does. A borrower who moves from PAYE to RAP may pay less each month and still finish with a discharge, but the horizon stretches from 20 years to 30.
Borrowers with a private loan have a shorter list. Private lenders set their own schedule, and none of the federal plans apply.
If your balance includes private borrowing, work out which part is federal before you plan, and our federal and private student loan comparison shows how the two products differ.
Next steps for picking your repayment plan
Find your first disbursement date, then read the plan list from there. Everything else follows from that one fact.
- Pull up your loan history and find the date of your first Direct Loan disbursement.
- If that date is on or after July 1, 2026, limit your choices to RAP and Tiered Standard.
- If it is earlier, check whether you want IBR, ICR, or PAYE before they end on July 1, 2028.
- Compare the total repayment, not the monthly amount, for each plan you qualify for.
- Check whether your employer qualifies for PSLF before you pick a fixed plan.
- Turn on auto-pay and set the reduction to 1%.
- Recalculate whenever your income changes, because every plan recalculates on a schedule.
The plan definitions on the Federal Student Aid repayment plans page include the RAP base-payment table, and the income-driven page covers the older plans in detail. The official SAVE explainer is still the best reference for what happened to that plan.
Verify current requirements. Federal student loan rules, interest rates, borrowing limits, and repayment plans change at least once a year. Rates reset every July 1 and loan limits are re-announced each fall.
This guide reflects the rules published by the U.S. Department of Education and Federal Student Aid as of October 2026, including the changes made by the One Big Beautiful Bill Act signed July 4, 2025 and the Department final rule effective July 1, 2026.
Before you sign a loan or switch a repayment plan, confirm the current terms on studentaid.gov, with your loan servicer, and with your school's financial aid office. Nothing here is financial, tax, or legal advice.
Photo: stevepb, Pixabay Content License, via Pixabay (https://pixabay.com/photos/income-tax-calculator-accounting-4097292/)
Fazlur Rahman
