Student Loan Repayment Options in 2026

Repayment isn't one path — it's a menu, and the menu changed in 2026. A federal law passed in 2025 replaced most of the old income-driven repayment plans with two new ones. The SAVE plan stopped being usable after years in court, and the standard 10-year plan stopped being the only fixed-term option. Here's what's in place today, checked directly against the Department of Education and studentaid.gov.

What happened to the SAVE plan?

This wasn't a sudden decision. SAVE (Saving on a Valuable Education) faced legal challenges almost immediately after its 2024 rollout, and courts kept blocking pieces of it through 2025 and into 2026. A 2025 reconciliation law — the Working Families Tax Cuts Act — then rebuilt federal repayment from the ground up, eliminating the old menu of income-driven plans (SAVE, PAYE, and ICR) for the future and replacing them with a single new income-driven option.

What replaced it — how does the Repayment Assistance Plan work?

RAP became available on July 1, 2026, according to the Department of Education's own fact sheet. Its selling point, in the Department's words, is ending "the cycle of payments that do little to reduce loan balances" — a real problem under the old plans, where government data the Department cites showed most income-driven borrowers owed more six years into repayment than they originally borrowed.

What is the new Tiered Standard plan, and how is it different from the old Standard plan?

The Department's own comparison: a $30,000 balance on the old Standard plan runs $341 a month over 10 years. The same balance under Tiered Standard drops to about $262 a month, spread over 15 years instead. For a borrower choosing between the two, that's the trade laid bare: about $79 more each month for five fewer years of payments, or $79 less each month stretched five years longer. Loans first disbursed before July 1, 2026 generally keep access to the original 10-year Standard plan, along with Graduated and Extended repayment options.

What's the difference between deferment and forbearance — and where's the trap?

How does the grace period work before repayment starts?

Interest continues to accrue during the grace period on unsubsidized loans. Toward the end of it, borrowers generally need to pick a repayment plan and decide whether to enroll in autopay — the grace period is also the natural moment to compare RAP, Tiered Standard, and IBR side by side using the studentaid.gov loan simulator.

Does enrolling in autopay actually save money right now?

1. Confirm the baseline discount

   Under the long-standing rule, enrolling in autopay (automatic bank withdrawal) cuts a Direct Loan's interest rate by 0.25 percentage points.

2. Check the temporary boost

   Borrowers already enrolled in autopay get an additional 0.75-point cut automatically — no action needed — bringing the total to 1 full percentage point through June 30, 2028.

3. Enroll before the deadline if not already signed up

   New enrollees need to sign up by September 30, 2026, through their loan servicer's account, to lock in the full 1-point discount.

4. Know the exception for defaulted loans

   Borrowers in default must first consolidate and apply for a new repayment plan through StudentAid.gov before autopay enrollment is possible.

Frequently asked questions

Do I have to reapply for a repayment plan every year?

Income-driven plans like RAP and IBR require annual recertification of income and family size, since the payment amount is recalculated each year. The Standard and Tiered Standard plans don't require recertification because the payment is fixed for the life of the loan.

Can I switch repayment plans more than once?

Generally, yes — borrowers can typically change repayment plans through their servicer or StudentAid.gov account, though switching plans can affect how interest is calculated and how much progress counts toward forgiveness, so it's worth confirming the effect before switching.

Does refinancing federal loans into a private loan make sense while all this is changing?

That decision trades away every federal-specific protection covered in this cluster — income-driven repayment, forgiveness eligibility, deferment rights, and death or disability discharge — for whatever terms a private lender offers, permanently and without an undo option. Given how much is still moving in the federal system, many borrowers wait for a clearer picture before giving up loans that carry these protections.

What happened to Graduated and Extended repayment plans?

Older loans aren't cut off from what they had before: anyone whose loans were first disbursed before July 1, 2026 generally retains access to the older Standard, Graduated, and Extended plans, alongside the option to move to RAP, Tiered Standard, or IBR. New loans disbursed on or after that date are directed toward Tiered Standard and RAP.

Common mistakes to avoid

• ✕Assuming SAVE is still an option because a servicer's paperwork or an old email still mentions it.
• ✕Requesting forbearance without realizing interest will start accruing on a subsidized loan that had been interest-free.
• ✕Missing the September 30, 2026 autopay enrollment deadline and losing the temporary 1-point interest rate reduction.
• ✕Letting a grace period expire without picking a repayment plan, which can default a borrower into whichever plan a servicer selects.
• ✕Consolidating loans without checking the effect on progress already made toward income-driven forgiveness.
• ✕Treating an old income-driven repayment estimate — from before July 2026 — as still accurate under the new rules.

When to talk to a professional