The short answer
Federal student loans now have two main repayment plans for new borrowing. The Repayment Assistance Plan (RAP), open since July 1, 2026, sets payments at 1 to 10 percent of adjusted gross income depending on income, minus $50 a month for each dependent, with a $10 minimum; on-time payments get unpaid monthly interest waived and up to $50 of principal matched, and any balance left after 30 years is forgiven. The Tiered Standard plan sets fixed payments over 10 to 25 years depending on how much you owe. Borrowers with loans made before July 1, 2026, can also use Income-Based Repayment, which for most takes 10 percent of discretionary income and forgives the rest after 20 years. PAYE and ICR close by July 1, 2028. The SAVE plan ended by court order in March 2026, and its borrowers have 90 days from their servicer's notice to choose a new plan.
The plans side by side
Which plans you can use depends mainly on when your loans were made. The table sets out the ones that matter now.
Swipe sideways to see the whole table.
| Plan | Who can use it | Monthly payment | When it ends |
|---|---|---|---|
| Repayment Assistance Plan (RAP) | Direct Loan borrowers, whenever the loans were made; not Parent PLUS Loans | 1% to 10% of adjusted gross income by income band, minus $50 per dependent, at least $10 | Remaining balance forgiven after 30 years of qualifying payments |
| Tiered Standard | Borrowers with at least one loan first disbursed on or after July 1, 2026 | Fixed, at least $50 | Paid off in 10 to 25 years, depending on the balance |
| Income-Based Repayment (IBR) | Direct and FFEL loans made before July 1, 2026 | 10% of discretionary income for most borrowers; 15% for some earlier ones | Remaining balance forgiven after 20 years, or 25 for some earlier borrowers |
| Standard (original) | Loans made before July 1, 2026 | Fixed | Paid off in up to 10 years |
| PAYE and ICR | Closing | Based on income | End no later than July 1, 2028 |
The Repayment Assistance Plan
RAP ties your payment to your adjusted gross income from your tax return. If your income is $10,000 or less, the payment is $10 a month. Above that, the percentage rises by one point for each $10,000 of income: 1 percent of your income between $10,000 and $20,000, 2 percent between $20,000 and $30,000, and so on up to 10 percent above $100,000. The percentage applies to your whole income, and the yearly amount is divided by 12.
| Adjusted gross income | Yearly payment before the dependent reduction |
|---|---|
| $10,000 or less | $120 ($10 a month) |
| Over $10,000 up to $20,000 | 1% of income |
| Over $20,000 up to $30,000 | 2% of income |
| Over $30,000 up to $40,000 | 3% of income |
| Over $40,000 up to $50,000 | 4% of income |
| Over $50,000 up to $60,000 | 5% of income |
| Over $60,000 up to $70,000 | 6% of income |
| Over $70,000 up to $80,000 | 7% of income |
| Over $80,000 up to $90,000 | 8% of income |
| Over $90,000 up to $100,000 | 9% of income |
| Over $100,000 | 10% of income |
Then come the features that set RAP apart. The payment drops by $50 a month for each dependent you claim on your tax return, though it never falls below $10. If an on-time payment does not cover the month's interest, the rest of that interest is waived, so the balance does not grow. And if the payment reduces your principal by less than $50, the government adds a matching principal payment of up to $50. After 30 years, or 360 qualifying payments, any remaining balance is forgiven, though the forgiven amount may count as income for tax purposes.
RAP payments also count toward Public Service Loan Forgiveness, which discharges the remaining balance after 120 qualifying payments for borrowers working full time for government or eligible nonprofit employers.
What RAP would cost: one borrower
Example (hypothetical): a teacher with one child
Leah owes $30,000 in Direct Loans at 6.5 percent interest. Her adjusted gross income is $45,000, which puts her in the 4 percent band: 4 percent of $45,000 is $1,800 a year, or $150 a month. She claims one dependent, which lowers the payment by $50, to $100 a month.
Interest on her balance runs about $162 a month, more than she pays. Under RAP, as long as she pays on time, the unpaid interest is waived and a matching principal payment of up to $50 keeps her balance falling. If her income rises, so does her payment, and if she works for a public school, each payment also counts toward Public Service Loan Forgiveness.
The Tiered Standard plan
The Tiered Standard plan is the fixed-payment option for loans made from July 1, 2026. Your term depends on the total Direct Loan principal you owe, counting all your Direct Loans, not only the new ones:
| Total principal balance | Repayment term |
|---|---|
| Under $25,000 | 10 years |
| $25,000 to under $50,000 | 15 years |
| $50,000 to under $100,000 | 20 years |
| $100,000 or more | 25 years |
Payments are fixed, with a minimum of $50 a month. A longer term lowers each payment but means paying interest for longer, so if you can afford more, paying ahead costs less overall. It suits borrowers with steady incomes who want a known end date.
Income-Based Repayment, for older loans
IBR remains open for Direct and FFEL loans made before July 1, 2026. For borrowers who first borrowed on or after July 1, 2014, it takes 10 percent of discretionary income and forgives any balance left after 20 years; earlier borrowers pay 15 percent with forgiveness after 25 years. The 2025 law removed the old requirement to show a partial financial hardship, so borrowers who once earned too much for IBR can now enroll.
Parent PLUS borrowers have a narrower path. Parent PLUS Loans cannot be repaid under RAP, and a consolidation loan that includes one must make at least one payment under ICR before July 1, 2028, to qualify for IBR later.
New loans have fewer choices
Loans first made on or after July 1, 2026, can be repaid only under the Tiered Standard plan or RAP. The older income-driven plans are not open to them, which is one reason a borrower with both old and new loans should look at how each set is treated before consolidating them.
Parent PLUS Loans made on or after that date cannot use RAP, so the Tiered Standard plan is their route. New graduate and parent borrowing is also capped more tightly than before, as our guide to subsidized and unsubsidized loans explains.
If you were on SAVE
The SAVE plan ended by court order on March 10, 2026. Servicers began sending notices on July 1, 2026, in groups, and each notice gives the borrower 90 days to choose a new plan. That means two people with the same servicer can have different deadlines; the clock runs from your servicer's notice, not from an email from Federal Student Aid.
If the 90 days pass, a final 30-day notice follows. Borrowers who still have not chosen are placed in a fixed-payment plan, and for those with no loans made on or after July 1, 2026, that is the original Standard plan, which can mean a much higher payment. Compare RAP and IBR before your deadline rather than letting the default decide.
What to gather before you choose
- Your loan list from your StudentAid.gov account, showing each loan's type (Direct, FFEL or Parent PLUS) and the date it was first disbursed.
- Your latest tax return, for your adjusted gross income and the number of dependents you claim.
- Your employer's details if you may qualify for Public Service Loan Forgiveness.
- Every notice from your servicer, especially any that gives a deadline to choose a plan.
With those in hand, the comparison below takes minutes rather than hours.
Choosing between them
- Low or uncertain income: RAP's floor of $10 a month, the dependent reduction and the interest waiver make it the safer choice for most borrowers whose income may not cover a fixed payment.
- Working toward Public Service Loan Forgiveness: RAP payments count, and so do payments under IBR, so pick the plan with the lower payment.
- Steady income and a wish to be done: the Tiered Standard plan, or the original Standard plan for older loans, costs less in total interest if you can afford the payment.
- Older loans and a high balance relative to income: compare IBR's 20-year forgiveness with RAP's 30 years; IBR may forgive sooner, while RAP may cost less each month.
Whatever you choose, sign up for automatic payments. Borrowers enrolled in auto pay by December 31, 2026, get a 1 percentage point interest rate reduction through June 30, 2028, as long as they stay enrolled.
Common questions
Can I switch from IBR to RAP later?
Yes. RAP is open to Direct Loan borrowers whenever their loans were made, so a borrower on IBR can move to RAP. Check with your servicer first, since moving between plans can affect how your payments count toward forgiveness.
Is forgiveness under RAP taxable?
It may be. The Department of Education notes that amounts forgiven after 30 years may be considered income for tax purposes. Forgiveness under Public Service Loan Forgiveness is a separate program.
Do RAP payments count toward Public Service Loan Forgiveness?
Yes. The 2025 law lets payments under RAP count toward Public Service Loan Forgiveness, which forgives the remaining balance after 120 qualifying payments made while working full time for a qualifying employer.
What happens if I do nothing after my SAVE notice?
After the 90 days, you receive a final 30-day notice. If you still do not choose, you are placed in a fixed-payment plan; for borrowers with no loans made on or after July 1, 2026, that is the original Standard plan.
Official sources
- StudentAid.gov — SAVE plan borrowers: choosing a different repayment plan
- Federal Student Aid — Repayment Assistance Plan (RAP)
- U.S. Department of Education — Fact sheet: simplifying student loan repayment
- U.S. Department of Education — Next steps for borrowers enrolled in the SAVE plan
- U.S. Department of Education — Enrollment period extended for the student loan interest rate reduction
Find your deadline, then compare
Log in to StudentAid.gov and your servicer's site, note which plan you are in and any deadline on your notices, and use StudentAid.gov's repayment tools to compare RAP, IBR and the fixed plans with your own income. If you are still borrowing, our guide to subsidized and unsubsidized loans explains the limits and rates, and the College Financial Aid Calculator estimates how much of the cost grants could cover first.
