Federal Loan Repayment Changes
Federal Loan Repayment Changes
Federal Loan Repayment Changes
The One Big Beautiful Bill Act (H.R.1), signed into law on July 4, 2025, introduces significant changes to the federal Title IV student aid programs and repayment plans. If you are currently paying back federal student loans, it is highly recommended that you reach out to your loan servicer. They can help you navigate how these upcoming changes, triggered by the One Big Beautiful Bill, apply to your unique financial situation. While this page provides a general summary, individuals already in repayment need to speak with their servicer before deciding on their next steps.
Notice of Regulatory Status: The U.S. Department of Education has not yet issued the final regulations for the One Big Beautiful Bill Act. Consequently, the information and answers provided below reflect our best interpretation of the legislation and the preliminary outcomes of the Negotiated Rulemaking sessions. These details are subject to change once the official "Final Rules" are published. While a specific release date has not been set, the Department is expected to finalize these regulations by June 1, 2026. The Office of Student Financial Aid Services is actively monitoring the legislation and its implementation details. This page will be updated regularly as additional guidance becomes available from the U.S. Department of Education.
- Fixed-Term Plans:
- Standard Repayment
- Graduated Repayment
- Extended Repayment
- Income Sensitive Repayment
- Income-Driven Plans (IDR):
- Income-Based Repayment (IBR)
- Pay As You Earn (PAYE)
- Saving on a Valuable Education (SAVE)
- Replaced Revised Pay As You Earn (REPAYE)
- Income-Contingent Repayment (ICR)
First Loan Borrowed on or after July 1st, 2026
- New Standard Repayment Plan:
- Four Fixed-Terms:
- 10 years: balances <$25,000
- 15 years: balances between $25,000-$49,999
- 20 years: balances between $50,000-$99,999
- 25 years: balances $100,000+
- Only 10-year plans qualify for Public Service Loan Forgiveness (PSLF). Note: PSLF requires at least 10 years of repayment.
- Four Fixed-Terms:
Student borrowers who do not select a plan will be placed into the Standard Plan.
New Income-Based Repayment Assistance Plan (RAP):
- Monthly payment: 1%-10% of Adjusted Gross Income (AGI)
- $10 minimum payment
- $50 deduction per dependent
- 30-year repayment term; forgiveness after 30 years
- No negative amortization (balances won't grow when payments don't cover interest)
- Payments count toward PSLF
| Borrowers' AGI | Monthly Payment |
|---|---|
| Less than $10,000 | $10/month |
| $10,000 - $19,999 | 1% of monthly AGI |
| $20,000 - $29,999 | 2% of monthly AGI |
| $30,000 - $39,999 | 3% of monthly AGI |
| $40,000 - $49,999 | 4% of monthly AGI |
| $50,000 - $59,999 | 5% of monthly AGI |
| $100,000+ | 10% of monthly AGI |
Current Borrowers
- IBR borrowers may remain in their plan
- All other non-Parent PLUS IDR borrowers must choose a new plan by July 1, 2028 or be moved to RAP
- Parent PLUS loan borrowers will be moved to the new Standard Plan after July 1st, 2028 unless they consolidate and enroll in an IDR before July 1, 2026. Doing so means they can remain in IBR for the duration of the repayment period.