Summary
The federal student loan repayment system is set to change in 2026 due to the One Big Beautiful Bill Act signed by President Donald Trump. New borrowers will have different repayment options, and certain types of loan forgiveness will become taxable again. There will also be new borrowing limits for different types of loans.
Key Facts
- The One Big Beautiful Bill Act was signed into law by President Donald Trump in July.
- Changes to loan repayment options will start on July 1, 2026, for new borrowers.
- New borrowers after July 1, 2026, can choose between the Standard Repayment Plan and the new Repayment Assistance Plan (RAP).
- RAP will calculate payments based on a borrower's income, with some paying as little as $10 per month.
- Existing repayment plans like Income-Contingent Repayment will be phased out by July 2028.
- Starting January 1, 2026, student loan forgiveness will be taxable again under income-driven repayment plans.
- New borrowing limits will be introduced, capping graduate students at $20,500 per year and $100,000 total.
- Parent PLUS loans taken after July 1, 2026, will not qualify for income-driven repayment plans.
