Major Changes Coming to Student Loan Repayment Plans
Recent legislation is bringing significant changes to how students will repay their federal loans, but there's been widespread confusion about what these changes actually mean. Let's break down the key points you need to know.
Important clarification: Existing student loan repayment plans will remain in place for current borrowers. The changes only affect loans disbursed on or after July 1st, 2026—meaning they primarily impact future students, not those already in repayment.
Two New Repayment Options
Starting in Fall 2026, borrowers will have only two repayment plan options:
1. Standard Repayment Plan
Monthly payments and repayment term determined by total amount borrowed
Likely structured with longer repayment periods for larger loan amounts
More interest paid over time with extended terms
2. Repayment Assistance Plan
An income-based option replacing current income-driven repayment plans
Designed to actually require payments (unlike some previous plans)
Minimum monthly payment of $10, even for those with calculated $0 payments
Major Policy Changes
Elimination of Deferment Options
Economic hardship deferments are ending
Unemployment deferments are being eliminated
No more indefinite payment postponements
Limited Forbearance
Total forbearance periods will be reduced
Exception: Medical and dental residents can receive 12-month forbearance with interest accrual
Loan Rehabilitation
Borrowers can rehabilitate defaulted loans twice (a second chance opportunity)
Minimum $10 monthly payment requirement begins July 1st, 2025
Public Service Loan Forgiveness Continues
Good news for public servants: payments under the new Repayment Assistance Plan will count toward Public Service Loan Forgiveness for federal, state, and local government employees.
These changes represent a shift toward ensuring all borrowers make consistent payments on their loans, eliminating the indefinite deferment situations that allowed some loans to remain unpaid for decades. While the changes may seem restrictive, they're designed to create a more sustainable and fair repayment system.
Note: If you currently have student loans, your repayment plan isn't changing. These new rules only affect future borrowers starting in 2026.
Need Help?