Student loan: Simple Essential Guide (2026)

Student loans 101 changed on July 1, 2026. The key points are that the SAVE plan has ended, a new income-driven plan (RAP) exists, and a new loan can change which plans you can use. Everything below comes from Federal Student Aid pages and one news report, and I label my own suggestions.

Student loan: The Quick Version of What Changed

According to Federal Student Aid, a court order ended the SAVE Plan in March 2026, so SAVE borrowers must choose another plan they’re eligible for. The plan comparison lists the Tiered Standard Plan (a fixed payment, no forgiveness, for borrowers with at least one loan first disbursed on or after July 1, 2026) and the Repayment Assistance Plan (RAP), which is the only income-driven plan if at least one loan was disbursed on or after that date.

Step 1: Figure Out Which Rules Apply to You

If All Your Loans Were Disbursed Before July 1, 2026

Federal Student Aid lists these options: the Standard, Graduated and Extended fixed plans, plus income-driven plans (IBR, ICR, PAYE and RAP, depending on loan type and disbursement date). Check the Dashboard on StudentAid.gov or the Repayment Calculator for your own list.

If You Have a Loan Disbursed On or After July 1, 2026

Tiered Standard is the only fixed option, and RAP is the only income-driven option, per the same page and the comparison. A CBS News report adds that borrowers with existing loans who take out a new loan after July 1 must repay all their federal loans under one of these two plans.

If You Were on the SAVE Plan

Servicers began notifying SAVE borrowers on July 1, 2026, in groups, and will notify all of them before the end of 2026. You have 90 days from the date of your servicer’s notice to choose a plan. If you miss the window, the servicer sends a final 30-day notice.

Step 2: Choose a Plan Deliberately

What Happens If You Don’t

Per Federal Student Aid, if you don’t choose, you’re automatically enrolled in a fixed plan: the Standard Repayment Plan if you have no loans disbursed on or after July 1, 2026, or the Tiered Standard Plan if you have such a loan in repayment. The page says those payments may be higher than income-driven payments, and that your servicer must notify you at least 21 days before your first due date on the new plan.

Where to Act

The same page says help from your servicer is free and that you shouldn’t pay anyone to apply for a plan. In my view, that makes your servicer and StudentAid.gov the places to start.

Step 3: If You’re Pursuing Public Service Loan Forgiveness (PSLF)

Federal Student Aid says all income-driven plans (IBR, ICR, PAYE and RAP) qualify for PSLF, and Tiered Standard payments do not. It also says time in the SAVE forbearance doesn’t count toward PSLF, though you may be able to buy back certain months of ineligible forbearance once you have 120 months of qualifying employment. Its recommendation is to submit a PSLF form each year and when you change jobs.

Step 4: If You’re a Parent With PLUS Loans

The plan comparison says ICR is the only income-driven plan for Parent PLUS borrowers, who had to consolidate before July 1, 2026, and that Tiered Standard is the only plan for Direct Parent PLUS loans and certain consolidations. The RAP page says consolidation loans that include an underlying Parent PLUS loan can’t use RAP.

Step 5: If You’re a Current or Prospective Student

The CBS News report lists new federal borrowing limits for loans made on or after July 1: parents can borrow up to $20,000 per year and $65,000 total per student; graduate students up to $20,500 per year with a $100,000 aggregate cap; certain professional programs up to $50,000 per year and $200,000 total; and a $257,500 lifetime cap, with some exceptions. It also says Grad PLUS is closed to new borrowers, with current borrowers grandfathered, and notes that program designations may change with ongoing litigation.

Step 6: Compare the Two New Plans

Tiered Standard

A fixed payment of at least $50 a month, with the term set by your balance at enrollment and no forgiveness listed, per the comparison. In my view, it can suit someone whose budget is stable and who wants a set end date.

RAP

According to the RAP page, your payment is your AGI times a tiered percentage (1% to 10%), divided by 12, reduced by $50 for each dependent on your federal tax return, with a $10 monthly minimum. The remaining balance is forgiven after 30 years (360 months) of qualifying payments, and forgiven amounts may be taxable income.

If your payment is less than that month’s interest, the page says the unpaid interest is subsidized so it does not accumulate. If a full, on-time payment doesn’t reduce principal by at least $50, the Secretary makes a matching principal payment, capped at $50. In my view, RAP is worth a close look if your income varies or a fixed payment would strain your budget.

IBR for Older Loans

Federal Student Aid lists IBR at 15% of discretionary income (10% for new borrowers), never more than the Standard 10-year payment, over 25 years (20 for new borrowers). ICR and PAYE end no later than July 1, 2028.

Step 7: Keep Your Records and Recheck Each Year

Rules and deadlines have shifted this year. My suggestion is to log in to StudentAid.gov at least once a year to look at your servicer, plan and loan dates.

Matching Your Next Move to Your Situation

“I was on SAVE and haven’t chosen a plan.” → Your 90 days run from the date on your servicer’s notice. Choose a plan you’re eligible for before it ends.
“All my loans predate July 2026.” → Review the fixed and income-driven plans listed for your loan types.
“I’m pursuing PSLF.” → Choose an income-driven plan, since Tiered Standard doesn’t qualify.
“I’m a Parent PLUS borrower.” → Review the Parent PLUS limits above and the plan options on the comparison page.
“I can’t afford my new payment.” → Federal Student Aid says you can request a deferment or forbearance from your servicer, but interest still accrues and these can affect PSLF and IDR discharge.

Common Questions Borrowers Are Asking Right Now

What happens if I do nothing in my 90 days? You’re automatically enrolled in the Standard or Tiered Standard plan, depending on your loans.

Does a new loan affect my older loans? The CBS News report says borrowers who take out a new loan after July 1 must repay all their federal loans under Tiered Standard or RAP.

How is RAP different? It uses a 1% to 10% of AGI formula, a $10 minimum, interest subsidies and a 30-year forgiveness term, per the RAP page.

Are ICR and PAYE gone? Federal Student Aid says they end no later than July 1, 2028.

Where I’d Start This Week

Log in to StudentAid.gov, look at your servicer and plan, and find the date on your servicer’s notice if you were on SAVE.

This article offers general information and my own opinions, not financial, tax, or legal advice. Laws, tax rules, and products change and can differ by location, so check current official sources and talk to a qualified professional about your own situation.

Sources:

Student Loans 101: What Every Borrower Needs to Know for 2026