Federal Loan Repayment Changes
The One Big Beautiful Bill Act (H.R.1), signed into law by President Trump on July 4, 2025, changes many rules related to Federal Aid (Title IV) programs effective July 1, 2026. Some of those changes impact Federal Direct Loans for both undergraduates and graduate students.
We encourage any borrower who is currently in repayment of their federal loans to contact their loan servicer and discuss how these changes may impact their situation. This webpage provides a high-level overview and there may be other details a current borrower in repayment will want to consider before deciding on how to proceed.
Current Repayment Plans (Before July 1, 2026)
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) 鈥� replaced Revised Pay As You Earn (REPAYE)
- Income-Contingent Repayment (ICR)
Changes Effective July 1, 2026
Applies to first loan borrowed on or after July 1, 2026.
New Standard Repayment Plan
Four fixed terms based on loan balance:
- 10 years: balances under $25,000
- 15 years: balances between $25,000鈥�$49,999
- 20 years: balances between $50,000鈥�$99,999
- 25 years: balances $100,000 or more
Only 10-year plans qualify for Public Service Loan Forgiveness (PSLF). Note: PSLF requires at least 10 years of repayment. 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%鈥�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鈥檛 grow when payments don鈥檛 cover interest)
- Payments count toward PSLF
RAP Income Grid
| Borrowers鈥� AGI | Monthly Payment |
|---|---|
| Less than $10,000 | $10/month |
| $10,000鈥�$19,999 | 1% of monthly AGI |
| $20,000鈥�$29,999 | 2% of monthly AGI |
| $30,000鈥�$39,999 | 3% of monthly AGI |
| $40,000鈥�$49,999 | 4% of monthly AGI |
| $50,000鈥�$59,999 | 5% of monthly AGI |
| $60,000鈥�$69,999 | 6% of monthly AGI |
| $70,000鈥�$79,999 | 7% of monthly AGI |
| $80,000鈥�$89,999 | 8% of monthly AGI |
| $90,000鈥�$99,999 | 9% of monthly AGI |
| $100,000 or more | 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 1, 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.
The One Big Beautiful Bill Act introduces significant changes to federal student aid programs, and while some provisions are clear, many others require further clarification from the U.S. Department of Education. As we receive more guidance and official updates, we will continue to revise and expand this webpage to reflect the most accurate and actionable information available.
Planning Ahead
For families that may still need additional funds beyond the new OB3 limits, consider investigating the following options:
Information included in this publication is subject to change. Contact the Office of Financial Aid with any questions you may have about this information.