Beginning July 2026, provisions from the 2023 federal spending law will take effect, introducing new repayment structures, borrowing caps for advanced degrees, and elimination of several income-driven repayment options. The Department of Education will replace existing income-driven plans with a standard repayment plan and a Repayment Assistance Plan (RAP). The standard plan sets fixed payments over 10 to 25 years based on original balances. RAP would set payments at 1%–10% of income with a $10 minimum and forgiveness after 30 years, making it less generous than prior plans such as SAVE. Borrowers with loans before July 1, 2026, have until 2028 to enroll in RAP; later borrowers face new rules.
"Beginning in July, the Department of Education plans to begin its process of eliminating existing income-driven repayment plans and replacing them with two options: a standard repayment plan and a new Repayment Assistance Plan. The standard repayment plan would set fixed payments for borrowers over a 10 to 25-year period based on the borrower's original balance. The Repayment Assistance Plan would serve as the income-based option for borrowers;"
"The new year is bringing a host of new changes for millions of student-loan borrowers. Beginning in July 2026, the student-loan provisions signed into law in President Donald Trump's "big beautiful" spending legislation are set to begin taking effect. Those provisions include rolling out new student-loan repayment plans, new borrowing caps, and eliminating existing income-driven repayment plans, which could result in higher monthly payments for borrowers."
Read at Business Insider
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