Anchor: Mayzie Olson
•7/1/2026
Starting July 1, millions of people nationwide will see changes with their student loan repayment plans, as the Trump administration implements new laws affecting borrowers under the Big Beautiful Bill Act.
The changes affect both current borrowers and those taking out new loans, with some existing repayment plans also now being phased out by July 2028.
For new loan borrowers, there are two repayment options to choose from.
The first is the Tiered Standard Plan. This one is similar to existing plans and is paid off like a typical loan. Borrowers set the time period in which they would like to pay off the loan and make payments accordingly.
The other new plan as of July 1, is the Repayment Assistance Plan, also known as RAP. This is the new income-driven plan on the market, where borrowers make payments based on what they earn.
If a borrower is already on a repayment plan, but takes out a new loan after July 1, all federal loans must then be paid under one of these two new plans mentioned above.
Current borrowers who do not take out a new loan, however, can keep their existing plan. These include the Standard Repayment Plan, Extended Repayment Plan, Graduated Repayment Plan, Income-Based Repayment (IBR), Pay As You Earn (PAYE) plan, and Income-Contingent Repayment.
The last two, the PAYE plan as well as the Income-Contingent Repayment plans will be phased out by July 2028. At that point, borrowers will need to choose a new plan.
Current borrowers are able to opt into the new RAP income-driven plan.
Back in March 2026, a federal judge struck down the Biden-era SAVE student loan repayment plan, affecting 7 million people who must find a new way to pay back their student loans.
As of July 1, those borrowers have 90 days to pick a new plan. They should also begin to receive notices to do so.
Former SAVE plan enrollees can choose from any plan they qualify for, including the new Repayment Assistance Plan.
Again, the Pay As You Earn plan and the Income-Contingent Repayment plan are both being phased out in two years.
Borrowers who do nothing within the 90-day period will automatically be enrolled in the Standard Plan.
For more information on the changes from the Big Beautiful Bill Act, click here.
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