How To Choose the Best Student Loan Repayment Plan

Federal student loan repayment changed significantly on July 1, 2026, and the best plan for you now depends largely on when you borrowed and what you want from repayment. Some borrowers have just two options, while others can still choose from several older plans.  

Here's a closer look at what's available and who qualifies so you can choose the best student loan repayment plan for you. 

Compare student loan refinance rates

What are the current federal student loan repayment plans?

As of July 1, 2026, federal borrowers have access to two new repayment plans. Several older plans are still available to legacy borrowers, meaning borrowers who took out all of their federal student loans before July 1, 2026, and haven’t borrowed again since. 

The two new plans available regardless of when you borrowed are: 

• Tiered Standard Repayment Plan: This new version of the Standard Plan offers fixed monthly payments over a period of 10, 15, 20, or 25 years, depending on how much you owe when repayment begins. 
• Repayment Assistance Plan (RAP): RAP is an income-driven repayment plan that adjusts your monthly payments to 1% to 10% of your adjusted gross income (AGI) divided by 12. Your payment is then reduced by $50 for each dependent, and any unpaid interest is waived each month. After 30 years of payments, your remaining loan balance is forgiven. New parent PLUS loans are not eligible for this plan. 

Legacy borrowers may also continue accessing these older plans:

• Standard Repayment Plan (older version): This plan offers fixed monthly payments over 10 years. It used to be the default plan for federal loan borrowers. 
• Graduated Repayment Plan: Payments start lower and increase every 2 years over a 10-year repayment period. 
• Extended Repayment Plan: This plan offers fixed or graduated monthly payments over a term of 25 years. You need at least a $30,000 balance to qualify.
• Income-Based Repayment (IBR): IBR adjusts your monthly payments to 10% to 15% of your discretionary income and extends your term to 20 or 25 years, depending on when you borrowed. It's the only legacy income-driven plan not being phased out.
• Pay As You Earn (PAYE): PAYE sets payments to 10% of your discretionary income and offers forgiveness after 20 years. This plan will be eliminated by July 1, 2028. 
• Income-Contingent Repayment (ICR): ICR sets payments at 20% or discretionary income or a fixed 12-year repayment amount adjusted for income, whichever is less. It will also be eliminated by July 1, 2028. 

What's new for repayment plans in 2026?

The federal student loan system was significantly changed in 2026. Your federal student loan repayment options depend on when your loans were disbursed and whether you have a parent PLUS loan.

“There’s a shift from being able to choose among multiple income-driven and standard repayment plan options to two options for borrowers who took out a federal loan after July 1, 2026,” explains Megan Walter, senior policy analyst at NASFAA.

New borrowers now generally have two repayment options: the Tiered Standard Repayment Plan and RAP. Borrowers with only loans from before July 1, 2026, may still qualify for older plans, including IBR.

At the same time, SAVE has ended, while PAYE and ICR are being phased out. Borrowers who remain in PAYE or ICR will need to move to RAP, IBR, or an eligible fixed-payment plan by July 1, 2028.

Here’s how three of the main repayment options compare:

Which repayment plan is best for my situation?

Your best student loan repayment plan depends on your financial situation, repayment goals, eligibility for loan forgiveness, and when you borrowed. 

• If you took out a federal loan on July 1, 2026: You’re limited to the Tiered Standard Plan and RAP. Compare both to see how much you'll pay each month, the amount of time you'll be in debt, and your long-term interest costs. 
• If all your loans were taken out before July 1, 2026: You have more repayment options, including IBR and some older plans, but keep in mind that PAYE and ICR will be eliminated by July 2028. If you're on either of those plans, you'll need to switch to a different plan, such as IBR or RAP, before that date. 
• If you can comfortably afford payments: Borrowers with a stable income and no plans for loan forgiveness may prefer the Standard Repayment Plan to get out of debt faster and minimize long-term interest costs. 
• If you need a lower monthly payment: An income-driven repayment plan such as RAP or IBR can tie your payment to your income so you have more financial breathing room. 
• If you're pursuing PSLF: Choose an eligible income-driven repayment plan that keeps your monthly payment manageable while you work toward the required 120 qualifying payments.
• If you were on SAVE: You’ll need to choose another repayment plan after receiving notice from your loan servicer. Your payments will likely increase on any of the remaining plans, but look for one with the most generous terms. 
• If you have parent PLUS loans: Parent PLUS loans are now shut out of income-driven repayment plans unless you consolidated them before July 1, 2026. If you take out a parent PLUS loan after that date, your only option is the new Tiered Standard Plan. 

“Borrowers should review their repayment options carefully to determine which is best for their situation," says Cathy Mueller, executive director of Mapping Your Future. “And recognizing that their situation could change, they should continually monitor which repayment plan is best for them.”

How do you switch repayment plans?

Once you’ve chosen a new repayment plan, you can request the change through your loan servicer or online through StudentAid.gov. 

• Contact your loan servicer: Ask to switch repayment plans and confirm which options you qualify for. Your servicer can also tell you what information or documentation you’ll need to provide. 
• Apply through StudentAid.gov: If you’re switching to an income-driven plan, complete the online IDR application and provide your income and family size information. You may be able to authorize the Department of Education to access your IRS tax information automatically, which can simplify both your application and future annual recertification.

“Servicers are dealing with a high volume of transition requests right now, so processing delays are common,” says Walter. “Accounts may sit in forbearance during that window, which generally doesn't count toward PSLF or IDR forgiveness, but interest still accrues.”

If your application is delayed, keep an eye on yoru accoiunt and confirm how your loans are being treated while you wait. Once your new plan is approved, review your first bill to make sure the payment amount and repayment plan are correct.