2026 Federal Student Loan Changes

RAP and Tiered Standard became available, the repayment-plan rules began separating borrowers based on whether they received a Direct Loan on or after July 1, 2026, and the temporary auto-pay interest reduction increased to 1%. Servicers also began sending SAVE borrowers notices requiring them to select another plan.

Borrowers leaving school without making another election are placed in Standard or Tiered Standard based on their loan-disbursement date. SAVE borrowers who miss the 90-day deadline in their individual servicer notice are also assigned to Standard or Tiered Standard. The notice identifies the specific deadline and destination plan.

The Repayment Assistance Plan is an income-driven plan based on AGI and dependents claimed on the federal tax return. The annual base amount ranges from $120 to 10% of AGI, the monthly payment falls by $50 per dependent but not below $10, unpaid monthly interest is subsidized after an on-time payment, and principal receives a match of up to $50. A remaining balance can be forgiven after 360 qualifying payments.

Eligible Direct Loan borrowers may choose RAP. It covers Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans for graduate or professional students, and Direct Consolidation Loans that do not include Parent PLUS debt. A borrower with a Direct Loan disbursed on or after July 1, 2026 has RAP as the only income-driven option.

A court-approved settlement ended SAVE in March 2026. Servicers began sending transition notices on July 1, and each affected borrower receives at least 90 days from the date of that notice to choose a legal repayment plan. There is no single 90-day deadline shared by every SAVE borrower.

Yes. Qualifying RAP payments can count toward Public Service Loan Forgiveness when the borrower also has eligible Direct Loans, works full time for a qualifying employer, and satisfies the other PSLF requirements. Tiered Standard is not a qualifying PSLF repayment plan.

The Department of Education announced that the standard 0.25% auto-pay interest rate reduction rises to a total of 1% beginning July 1, 2026 — an extra 0.75 percentage points on top of the existing servicer discount. It is temporary and it is not automatic for everyone: it covers Direct Loans originated after July 1, 2012 held by borrowers who are already enrolled in auto pay or who enroll by September 30, 2026, and it runs through June 30, 2028. Borrowers already on auto pay do not need to do anything. Enrollment is free through the official loan servicer.

Compare the bill with the balance, interest rate, repayment plan, and next payment shown in the StudentAid.gov Dashboard. Save the statement and calculation, then contact the official servicer listed in the Dashboard. Do not pay a third party to fix an account or enroll you in a federal plan.

Yes. Federal Student Aid lists CRI among its official servicers. Confirm the assignment and follow the servicer link from the StudentAid.gov Dashboard instead of relying on an email link or search advertisement.

Ordinary IDR forgiveness received in 2026 or later is generally federal taxable cancellation-of-debt income because the broad ARPA exclusion ended after 2025. PSLF remains federally tax-free, as do qualifying death and total-and-permanent-disability discharges.