Student Loan Repayment Overhaul in 2026

Student Loan Repayment Overhaul in 2026

As the calendar turns to 2026, federal student loan policy in the U.S. is entering a period of sweeping change that will affect current borrowers, future students, and parents who take out loans for their children’s education.  These reforms stem primarily from the One Big Beautiful Bill Act (passed in mid-2025), which restructures repayment options and tightens borrowing limits effective July 1, 2026 and beyond.  Repayment Options: Fewer Plans, New Structure A centerpiece of the overhaul is a major simplification — and, in some cases, restriction — of federal student loan repayment plans: New borrowers as of July 1, 2026 will have only two repayment choices : Standard Repayment Plan : Fixed monthly payments with terms based on how much a borrower owes (from 10 up to 25 years).  Repayment Assistance Plan (RAP): A new income-driven option that ties payments to income and forgives remaining debt after up to 30 years of qualifying payments. It also includes a minimum payment of $10 per month .  Ex…