Student Loan Repayment and Forgiveness: Your Options After the 2026 Changes

Federal student loans went through their biggest shake-up in decades in 2026. If you’ve been confused, you’re in good company. Today’s lesson cuts through the noise: what changed, what your options are, and how to make sure you’re not paying more than you have to. This applies to federal student loans. Private loans follow different rules.

Professor’s first rule: Open your mail and email from your loan servicer. Deadlines in 2026 matter, and if you don’t respond, you may be placed in a plan that costs you more.

Lesson 1: Know What You Owe

Log in to StudentAid.gov to see all your federal loans, your loan types, your servicer, and your repayment plan.
Make sure your servicer has your current address, phone, and email.
Note the loan types. Direct Loans, Parent PLUS loans, and older FFEL loans have different options.

Lesson 2: What Changed in 2026

The SAVE plan has ended. Borrowers who were on SAVE are getting notices from their servicers and have about 90 days from their notice to pick a new plan. If you don’t choose, you’ll be placed in the Standard plan, which may have a much higher payment. You can still switch to an income-driven plan later.
A new income-driven plan, RAP, started July 1, 2026. The Repayment Assistance Plan sets payments based on a percentage of your income, with a small minimum payment and reductions for dependents.
Taking out new loans or consolidating on or after July 1, 2026 limits your choices. In that case, your options generally become RAP and a new Tiered Standard plan. Think carefully before consolidating or borrowing more.
Older plans are phasing out. PAYE and ICR are being phased out, while Income-Based Repayment (IBR) remains for many existing borrowers.

Lesson 3: Your Main Repayment Options

Income-Based Repayment (IBR): Payments are a percentage of your discretionary income (10% for newer borrowers, 15% for older ones), with any remaining balance forgiven after 20 or 25 years of payments. It counts toward PSLF.
Repayment Assistance Plan (RAP): The new income-driven plan. Payments are based on your income, with a low minimum, and any remaining balance is forgiven after a longer period (up to 30 years). It also counts toward PSLF.
Standard plans: Fixed payments that pay the loan off fastest with the least interest, if you can afford them.

Use the Loan Simulator on StudentAid.gov to compare your monthly payments under each plan, or call your servicer and ask them to walk you through it. Pick the plan that fits your budget and goals.

Tax note: Starting in 2026, balances forgiven at the end of an income-driven plan may count as taxable income on your federal return again. Forgiveness through PSLF stays tax-free.

Lesson 4: Public Service Loan Forgiveness (PSLF)

If you work full time for a government agency or a qualifying nonprofit, PSLF forgives your remaining federal Direct Loan balance, tax-free, after 120 qualifying monthly payments (about 10 years).

You must be on a qualifying plan, which generally means an income-driven plan like IBR or RAP.
Certify your employment regularly using the PSLF Help Tool on StudentAid.gov.
If you were on SAVE, the months in SAVE forbearance generally didn’t count, so switch to a qualifying plan promptly.
A new federal rule may exclude some employers from PSLF, and it’s being challenged in court. Check your employer’s status on StudentAid.gov.

Lesson 5: Other Ways Loans Can Be Forgiven

Teacher Loan Forgiveness: Up to $17,500 for teachers who work five years in qualifying low-income schools.
Total and Permanent Disability Discharge: If you have a qualifying disability, as documented by the VA, Social Security, or a doctor, your federal loans can be discharged. Many people qualify and never apply.
Death discharge: Federal student loans are discharged if the borrower dies, and Parent PLUS loans are discharged if the parent or the student dies. Family members don’t inherit them.
Closed school and borrower defense: If your school closed while you were enrolled, or misled you, you may be able to get your loans discharged.

Lesson 6: Can’t Afford Your Payment?

Switch to an income-driven plan first. For people with very low incomes, payments can be very small.
Deferment or forbearance can pause payments for things like unemployment or hardship, but interest usually keeps adding up. Use them sparingly.
Avoid default. Defaulted federal loans can lead to collection fees, seized tax refunds, wage garnishment, and in some cases reduced Social Security benefits. That’s a big concern for older borrowers.
Already in default? Loan rehabilitation (a series of affordable payments) or consolidation can get you out. Contact the Default Resolution Group through StudentAid.gov.

Lesson 7: Parents and Grandparents With Parent PLUS Loans

Parent PLUS loans have fewer repayment options than student loans, and the 2026 law changed the rules again. If you’re paying Parent PLUS loans, especially on a fixed income, call your servicer and ask exactly which income-driven options are available to you, and get free advice before consolidating or borrowing more.

Scam Alert

You never have to pay for help with federal student loans. Everything a “debt relief” company offers, you can do free at StudentAid.gov or with your servicer.
Never give out your StudentAid.gov login or let a company log in for you.
Be wary of calls, texts, or ads promising “immediate forgiveness” or new “Biden” or “Trump” forgiveness programs for an upfront fee.

Quick Review

Log in to StudentAid.gov and know your loans.
SAVE has ended. Respond to your servicer’s notice and choose a plan.
Compare IBR, the new RAP, and Standard with the Loan Simulator.
Think twice before consolidating or borrowing after July 1, 2026.
Public service workers: pursue PSLF and certify your employment.
Check teacher, disability, death, and closed-school discharges.
Avoid default. Use income-driven plans and rehabilitation.
Never pay for student loan help.

Need More Than Savings?

Our sister site Chances.org has free, step-by-step guides:

How to Stop Worrying About Money: practical steps toward peace of mind
Free Monthly Budget Worksheet: make room for your payment
Government Benefits: programs you may qualify for

Class dismissed. Go log in to StudentAid.gov today, it takes five minutes.

Student loan rules changed significantly in 2025 and 2026, and some changes are still being phased in or challenged in court. Always confirm current details at StudentAid.gov or with your loan servicer. This lesson is general information, not financial or legal advice.