Federal student loan repayment plans are changing in 2026.

Starting July 1, 2026, the federal student loan system will change how borrowers repay their loans. While current borrowers will not see the immediate changes, students planning to borrow in the future could face fewer repayment options.

“Most pieces are set, but things are still evolving,” said Assistant Director of Special Programs David Bender. “By July 1, that’s when students should expect to see everything set in stone.”

For students taking out new federal loans after the changes, there will be two repayment plans.

One option is a standard repayment plan with fixed monthly payments. Unlike the traditional 10-year plan, the length of repayment will depend on the total loan amount rather than automatically lasting 10 years.

The second option is a new income-based plan called the Repayment Assistance Plan, or RAP. With RAP, monthly payments are based on income, not loan balance. Repayment can last up to 30 years, and any remaining balance after that period can be forgiven. However, that forgiven amount could be taxed.

Some details are still being finalized, Bender said, and students should rely on official federal resources for updates. “StudentAid.gov is still the best resource as far as reading up on all those repayment plans and what’s changing,” he said.

For many students, understanding repayment plans and long-term costs feels overwhelming. Amelie Burleson, a sophomore social work major, said tracking her loans has been difficult. “I tried to look on the website to see how much interest I’ve earned, but I wasn’t able to figure out the website,” Burleson said. “So, I kind of just gave up because I was confused.”

The uncertainty around repayment makes growing balances feel intimidating. “I know I’m accumulating all this money that’s getting worse and worse every year,” she said. “That freaks me out a little bit for sure.”

What this means for current borrowers

Borrowers who take out loans before July 1 will not be required to change repayment plans immediately. Current borrowers can stay on their existing plan or switch to RAP when it becomes available. Borrowers enrolled in plans such as Parent PLUS, SAVE, PAYE or ICR may need to switch plans by 2028 as those options end.

What this means for graduate students

Students planning to attend graduate school after 2026 may face stricter borrowing limits. The Federal Grad PLUS loan program, which allowed students to borrow the full cost of attendance, is being eliminated. Federal loans may no longer cover all graduate school expenses, meaning students may have to rely more on private loans, institutional aid or scholarships.

“Anytime you’re taking out a loan, assume that you have to pay back the whole loan,” Bender said.