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2026 CHANGES —
The Massive Changes Coming in 2026 — And Why You Need to Act Now
2026 is the most consequential year for student loan borrowers in decades. The One Big Beautiful Bill Act, passed by Congress in 2025, is overhauling the entire repayment system. Here’s what’s changing and what it means for you.
Change 1: The SAVE Plan Is Being Eliminated
The SAVE Plan — the Biden administration’s most generous income-driven repayment plan, which offered payments as low as $0 for low-income borrowers and faster forgiveness timelines — has been ruled illegal and is being shut down through a settlement agreement with the State of Missouri.
The roughly 7 million borrowers still enrolled in SAVE will be required to choose a new repayment plan. If you’re currently on SAVE, you need to act before you’re automatically moved to a plan that may not be in your best interest.
Change 2: IDR Plans Are Being Phased Out for New Borrowers
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Starting July 1, 2026, new borrowers will only have two repayment plan options: a new Standard Plan and the Repayment Assistance Plan (RAP). The current IDR plans (ICR, PAYE, IBR) will no longer be available to new borrowers.
RAP extends the forgiveness timeline to 30 years — compared to 20-25 years under current IDR plans. For a family earning the median household income of $81,000, monthly payments under RAP would be approximately $440, compared to just $36 under the old SAVE plan.
Change 3: Consolidation After July 1, 2026 Changes Your Options
If you consolidate existing loans or take out new loans after July 1, 2026, you lose access to the legacy IDR plans and are forced into the new system. This is a one-way door — once you cross it, you can’t go back.
If you have FFEL or Perkins loans that you’ve been considering consolidating into Direct Loans for PSLF eligibility, the deadline to do so under the current rules is effectively before July 1, 2026.
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Change 4: PSLF Rules Are Changing
Starting July 1, 2026, the Department of Education will be able to deny PSLF to borrowers whose employers are deemed to have a “substantial illegal purpose.” The definition of what constitutes “substantial illegal purpose” will be determined by the Education Secretary, not the courts. Several cities have already filed lawsuits over this.
If you work for a qualifying employer and are currently pursuing PSLF, submit your Employment Certification Form now to document your eligibility under the current rules.
Change 5: Parent PLUS Loans Lose Access to PSLF
Under the new law, new Parent PLUS loans taken out after July 1, 2026 will only have access to the Standard repayment plan and will not be eligible for PSLF. If you’re a parent planning to borrow for your child’s education, this is a significant change.
Change 6: Forbearance and Deferment Options Are Shrinking
For loans taken out after July 2027, economic hardship and unemployment deferment will no longer be available. Forbearance will be limited to 9 months within any two-year period, down from the current limit of one year at a time and three years total.
[NEXT PAGE: The Action Plan — Exactly What to Do Before the Deadline →]
