New Student Loan Rules in 2026: Avoid 30- year plans and payment hikes

New Federal Student Loan Rules Are Coming—Here’s How to Protect Yourself

Starting in 2026, millions of federal student loan borrowers will lose access to their current repayment plans—whether they want to or not. For many, this could mean tens of thousands of dollars in extra payments and being locked into repayment for up to 30 years.

If you log in to check your balance in a couple of years and see that your monthly bill has doubled or tripled, this change could be the reason. The good news? You still have time to act—if you know the deadlines and take the right steps now.

What’s Changing Under the “One Big Beautiful Bill”

On July 4, 2025, Congress passed a sweeping student loan reform bill. This legislation will eliminate popular income-driven repayment (IDR) plans such as:

• SAVE (Saving on a Valuable Education)
• PAYE (Pay As You Earn)
• ICR (Income-Contingent Repayment for Parent PLUS borrowers)

In their place, only two repayment options will remain:

1. Revised Standard Repayment Plan – Extended based on your total borrowed amount (10–25 years).
2. Repayment Assistance Program (RAP) – Payments of $10/month minimum up to 10% of your Adjusted Gross Income (AGI), with forgiveness after 30 years.

Public Service Loan Forgiveness (PSLF) will remain unchanged for qualifying borrowers.

Key Deadlines Borrowers Must Know

• July 1, 2026:
• All new borrowers will only have access to RAP or the Revised Standard Plan.
• Parent PLUS borrowers must consolidate and enroll in Income-Based Repayment (IBR) to retain payment relief options.
• July 1, 2028:
• Existing borrowers on current IDR plans must re-enroll by this date or be automatically moved to RAP.

Why this matters: Automatic enrollment into RAP means 30 years of payments—and no $0 payment months.

Borrowing Caps: Big Changes Ahead

The bill also imposes new lifetime borrowing limits:

• Graduate students: $100,000
• Professional degrees (law, medical, MBA): $200,000
• Parent PLUS loans: $65,000

Parent PLUS borrowers are particularly at risk—if they do nothing, they will lose access to all income-driven repayment plans starting July 2026. Double consolidation strategies (which LoanSense has helped clients complete) will no longer be possible after that date.

How the Repayment Assistance Program Works

RAP calculates payments as:

• Minimum: $10/month
• Maximum: 10% of AGI
• Forgiveness: After 30 years
• No $0 payment option (unlike SAVE and PAYE)
• No income cap – meaning high earners could see payments spike significantly.

If your income increases, your monthly bill could skyrocket. Without proactive planning, you could end up paying thousands more each year—and for much longer.

Real-World Impacts

• Higher monthly payments for many borrowers
• Longer repayment terms (25–30 years instead of 20–25)
• Loss of flexibility with no $0 payment safety net
• Immediate action required for Parent PLUS borrowers to keep access to affordable plans

What You Should Do Right Now

1. Check your current repayment plan – Are you on SAVE, PAYE, or ICR?
2. Mark your calendar for July 1, 2026, and July 1, 2028 deadlines.
3. Submit updated proof of income strategically to avoid payment spikes (LoanSense can help).
4. Parent PLUS borrowers – Consolidate and enroll in IBR before the 2026 deadline.

💡 Pro Tip: Never automatically link your IRS tax data to studentaid.gov without first understanding the impact on your payment amount. Using older or lower income documentation can keep your payments affordable.

LoanSense Can Help You Beat the Clock

We’ve helped thousands of borrowers reduce payments by hundreds of dollars per month—and keep their repayment terms short. Whether you’re working toward PSLF or just trying to pay off your debt faster, we can:

• Recommend the best repayment plan for your situation
• Handle all paperwork for you
• Prevent costly auto-enrollments into RAP

📅 Schedule your personalized repayment review today → Book a LoanSense Session