Student Loan Repayment Options US: IBR, RAP and PSLF (2026)

By Hamid Ali, Founder of DebtShift · Updated October 14, 2026 · United States

A letter from your loan servicer says your repayment plan is over and you have 90 days to choose a new one.

Short answer: If you were on SAVE, it ended after a court ruling on March 10, 2026, and you must pick another plan. For most people with older loans the choices are IBR (open to loans from before July 1, 2026) or RAP, the new plan that launched July 1, 2026. RAP payments are 1% to 10% of your income with a $10 minimum. If you do nothing, you can be moved to a Standard-type plan.

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If you were on SAVE: the clock

A federal court vacated SAVE on March 10, 2026 and the One Big Beautiful Bill Act ended it by law. Servicers sent notices between July 1 and August 15, and each notice gives you 90 days to choose another plan (ED Financial, Tate Law). Count 90 days from your notice date: that is between September 29 and November 13. Borrowers who don’t choose are placed in a Standard-type plan.

Check your servicer account today, find the notice date, and choose before it runs out.

The plans side by side

Plan	Payment	Forgiveness	Counts for PSLF
IBR (first loan before July 1, 2014)	15% of discretionary income	25 years	Yes
IBR (first loan on or after July 1, 2014)	10% of discretionary income	20 years	Yes
RAP	1% to 10% of AGI, $10 minimum	30 years	Yes
PAYE / ICR	10% (PAYE) or up to 20% (ICR) of discretionary income	20 / 25 years	Yes
Tiered Standard (new loans only)	Fixed, 10 to 25 years by balance	None	No

Sources: ED Financial, Tate Law. PAYE and ICR close to new enrollment on July 1, 2027, and everyone on them must move by July 1, 2028.

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What RAP costs, in real numbers

RAP takes a percentage of your whole adjusted gross income, based on the bracket you fall in, divides it by 12, and subtracts $50 for each dependent on your tax return (NerdWallet). The minimum is $10 a month.

AGI	Bracket rate	Monthly payment
$25,000, no dependents	2%	$41.67
$45,000, no dependents	4%	$150.00
$45,000, one dependent	4%	$100.00
$75,000, no dependents	7%	$437.50
$120,000, no dependents	10%	$1,000.00

Illustrations we calculated from the published brackets. RAP also waives unpaid monthly interest and guarantees at least $50 of principal reduction each month.

RAP never goes to $0, and it doesn’t protect any income the way IBR does. That is the real trade-off: more predictable and kinder on interest, but someone with a very low income might pay less under IBR, which allows a $0 payment.

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Tiered Standard: a cliff nobody mentions

If your first loan was disbursed on or after July 1, 2026, your options are RAP or the Tiered Standard plan. Under $25,000 the term is 10 years, $25,000 to $49,999 is 15 years, $50,000 to $99,999 is 20, and $100,000 or more is 25 (Tate Law). On a 6.5% loan, a $24,999 balance is about $284 a month, while $25,000 is about $218 (our calculation matches that page). The plan has no forgiveness and doesn’t count for PSLF.

That drop in the monthly payment comes with a longer term. On $30,000 at 6.5%, 10 years would cost about $10,900 in interest and 15 years about $17,000, which is the price of the lower payment.

Public Service Loan Forgiveness

PSLF still needs 120 qualifying payments. IBR, PAYE, ICR and RAP all count, and switching between them doesn’t reset your count (Tate Law). A new employer-eligibility rule took effect July 1, 2026: employers can be ruled ineligible for a pattern of repeated or systemic illegal activity, and the article says credit earned while an employer was qualifying is generally kept (Mondaq). If you work for a nonprofit or government body, check your employer on StudentAid.gov.

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I was on SAVE and ignored the notice. What happens now?

If you don’t choose, you can be placed in a Standard-type plan (Tate Law). That payment can be much higher than an income-based one. Log in to your servicer account today and pick a plan, because the 90-day window ends between late September and mid November depending on your notice date.

Is RAP better than IBR?

It depends on your income. RAP uses a flat percentage of your whole AGI with a $10 minimum, waives unpaid interest, and guarantees at least $50 off principal a month, but it runs 30 years. IBR uses discretionary income, can go to $0, and forgives after 20 or 25 years (NerdWallet). Compare both in the loan simulator before you switch.

Do my years toward forgiveness reset if I switch?

Not between the main plans. Qualifying months carry over between SAVE, PAYE, IBR, ICR and RAP, though credit earned on RAP generally doesn’t count back toward IBR’s timeline (Tate Law). Ask your servicer to confirm your count in writing.

Does the new Tiered Standard plan count for PSLF?

No. The servicer page says it isn’t a qualifying plan for PSLF (ED Financial). If you’re pursuing Public Service Loan Forgiveness, use an income-driven plan such as IBR or RAP.

Is forgiven student loan debt taxed?

The servicer page warns that forgiven amounts may be taxable (ED Financial). Check the current tax rule for your forgiveness type before you rely on a figure.

Are they still garnishing wages and seizing tax refunds?

The Education Department delayed involuntary collections on January 16, 2026 and called it temporary (Education Department). Check StudentAid.gov for the current status, and read our guide to the student loan tax refund offset.

What about private student loans?

None of this applies. Federal repayment plans, RAP and PSLF cover federal loans only. For private loans see our guides on collections and the statute of limitations and what happens if a cosigner dies.

Disclaimer: DebtShift is an educational platform operated by H Ali Logistics Ltd. This article is general education, not legal or financial advice. For free, nonprofit credit counseling, contact the National Foundation for Credit Counseling (NFCC) at nfcc.org or 877-360-6322.

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Last reviewed October 2026