Current Federal Student Loan Repayment Plans

New rules that went into effect in July 2026 changed which repayment plans federal student loan borrowers can choose from. 

If you took out a new loan on or after July 1, 2026, your options are generally limited to the new Tiered Standard Repayment Plan or the Repayment Assistance Plan (RAP). Borrowers with only older loans have more options, including the Standard, Graduated, Extended, and several income-driven repayment (IDR) plans. However, two of those plans — Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) — will be phased out by July 1, 2028.

This guide breaks down the current federal student loan repayment plans, who qualifies for each, and how to choose the right option for your financial situation.

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Federal repayment plan options as of July 1, 2026

Which repayment plans am I eligible for?

The federal student loan repayment plans available to you depend on when your loans were first disbursed and whether you have parent PLUS loans.

If you borrowed federal loans on or after July 1, 2026

If you have any Direct Subsidized or Unsubsidized Loans loans disbursed on or after July 1, 2026, you'll have two repayment plan options:

• Tiered Standard Repayment Plan: Fixed monthly payments over 10 to 25 years, depending on your loan balance.
• Repayment Assistance Plan (RAP): An income-driven repayment plan with monthly payments based on your income over a 30-year term. Any unpaid interest after your monthly payment is waived, and any remaining balance is forgiven after 30 years. RAP is also the only income-driven plan available for borrowers pursuing Public Service Loan Forgiveness (PSLF).

Parent PLUS loans first disbursed on or after July 1, 2026, must be repaid under the Tiered Standard Repayment Plan because they aren't eligible for RAP.

If all of your federal loans were disbursed before July 1, 2026

If all of your federal student loans were disbursed before July 1, 2026, you can still enroll in one of the following repayment plans:

• Standard Repayment Plan: Fixed monthly payments over 10 years, or up to 30 years for Direct Consolidation Loans. This plan generally results in the lowest total interest costs.
• Graduated Repayment Plan: Payments start low and increase every 2years, typically over 10 years (or up to 30 years for consolidation loans). You'll generally pay more interest than under the Standard Repayment Plan.
• Extended Repayment Plan: Available if you owe more than $30,000 in eligible federal student loans. You can choose fixed or graduated payments over as many as 25 years.
• Income-Based Repayment (IBR) Plan: Available to borrowers who first borrowed between July 1, 2014, and July 1, 2026. Payments are generally 10% of discretionary income over a 20-year repayment term, and the partial financial hardship requirement has been eliminated.
• Repayment Assistance Plan (RAP): The new income-driven repayment plan with payments based on your income over a fixed 30-year term. Any unpaid interest after your monthly payment is waived, and any remaining balance is forgiven after 30 years.
• Income-Contingent Repayment (ICR) Plan: Available only through June 30, 2028. This is the only income-driven repayment plan available to parent PLUS borrowers who consolidated their loans before July 1, 2026. Payments are generally based on 20% of discretionary income, with forgiveness after 25 years.
• Pay As You Earn (PAYE) Plan: Monthly payments are generally 10% of discretionary income, with forgiveness after 20 years. Eligible borrowers must enroll by June 30, 2027, and can remain in the plan through June 30, 2028.

If you're currently enrolled in ICR or PAYE, you'll need to switch to another eligible repayment plan by July 1, 2028. If you don't choose a new plan, you'll automatically be moved to RAP. The exception is Direct Consolidation Loans that repaid parent PLUS loans, which aren't eligible for RAP. Those borrowers will instead be moved to IBR if they're enrolled in ICR before July 1, 2028.

How to choose the right repayment plan for you 

Your repayment plan affects both your monthly budget and how long you'll be in debt. Here are the key factors to consider when deciding which plan is right for you:

• Income: If your earnings are low, an eligible IDR plan can help keep your payments affordable. But if you're earning a higher income, especially 6 figures or more, sticking with the Standard Repayment Plan may help you pay off your loans faster and with less interest.
• Job stability: If your job or industry is unpredictable, consider an eligible IDR plan to lower your monthly payments and free up cash in case of a layoff. Even stable jobs can shift, so it's wise to build flexibility into your repayment strategy.
• Outstanding loan balance: Your total loan amount can influence which plans you qualify for. For example, the Extended Repayment Plan is only available if you owe more than $30,000 in federal student loans. 
• Interest costs: Lower monthly payments may sound appealing, but longer repayment terms typically mean paying more in total interest over time. Take time to compare the total interest you’d pay under each plan, not just the monthly bill.
• Eligibility for loan forgiveness: Federal forgiveness programs like Public Service Loan Forgiveness (PSLF) and IDR forgiveness are only available if you're on an income-driven repayment plan. If you're aiming for forgiveness, be sure your plan qualifies.

Keep in mind that the right plan for you today may not be the best fit down the road as your income, expenses, or career goals change.

“You want to make sure that you are accounting for the different life changes that could occur during this time, like buying a home or starting a family, and make sure that the student loan payment can still fit comfortably in their monthly budget even with those big, and expensive, life changes,” says Chris Jackson, a certified financial planner (CFP) at CPJ Financial.

Is now a good time to refinance my federal loans? 

With recent changes to federal student loan repayment plans, you may wonder whether refinancing makes more sense than switching to another federal plan.

Refinancing could be worth considering if you:

• Have high-interest federal loans: Graduate PLUS and parent PLUS loans typically carry higher interest rates than other federal loans. Refinancing could reduce your interest costs if you qualify for a lower rate.
• Earn too much to benefit from income-driven repayment: If your income is high relative to your loan balance, an income-driven plan may offer little payment relief or potential forgiveness.
• Don't plan to pursue loan forgiveness: If you expect to repay your loans in full rather than pursue Public Service Loan Forgiveness (PSLF) or Teacher Loan Forgiveness (TLF), refinancing could help you save money.
• Have strong credit and stable employment: A high credit score and dependable income can help you qualify for competitive refinance rates and make you less likely to need federal payment relief.

Before refinancing, use a student loan calculator to compare your potential savings with the benefits of keeping your loans federal. Once you refinance, you'll permanently lose access to federal repayment plans, forgiveness programs, and other borrower protections.

Can I switch repayment plans later? 

One of the advantages of federal student loans is that you can switch repayment plans at any time, something private student loans typically don’t allow.

To change your plan, contact your loan servicer. If you have no new loans disbursed on or after July 1, 2026, and you're applying for an IDR plan, you'll need to provide details about your income and family size. For other plans, you can fill out a Repayment Plan Request form.

Keep in mind that switching plans can affect your repayment timeline or forgiveness eligibility. For example, moving from the Standard Repayment Plan to an IDR plan may lower your monthly payments but could also extend your repayment term and increase the total amount of interest you pay.