If any Direct Loan of yours was first disbursed on or after July 1, 2026, your only choices are the new Repayment Assistance Plan (RAP) and Tiered Standard. Under RAP your payment is a share of your income divided by 12, minus $50 per dependent, with a $10 monthly floor.
Studentaid.gov also lists the older plans: Standard, Graduated, Extended, IBR, ICR and PAYE. Which ones you can use depends on when your loans were first disbursed. This guide summarizes studentaid.gov pages (updated 24 August 2026) read on 20 October 2026. The program is changing under the One Big Beautiful Bill Act, so confirm details before you pick a plan. It is general information, not financial advice.
The short answer
- New loans (July 1, 2026 or later): RAP and/or Tiered Standard only, for all your Direct Loans.
- Default: Tiered Standard, if you pick nothing on loans disbursed on or after July 1, 2026.
- RAP payment: a percent of annual income (usually AGI) divided by 12, minus $50 per dependent, never below $10 a month.
- Not eligible for RAP: Parent PLUS loans, consolidation loans that repaid a Parent PLUS, and FFEL, Perkins and HEAL loans.
- Older income-driven plans: IBR, ICR and PAYE are closed to anyone who receives a new loan, including a new consolidation loan, on or after July 1, 2026.
Which repayment plans exist, and how do they differ?
Read the table by loan type first, then by how fast you want to pay.
| Plan | What studentaid.gov says |
|---|---|
| Standard | 10 years (10 to 30 for consolidation loans) |
| Tiered Standard | All Direct Loans; 10 to 25 years depending on amount borrowed; the default for loans disbursed on or after July 1, 2026 if you pick nothing |
| Graduated | Lower payments first, rising about every 2 years; 10 years (up to 30 for consolidation) |
| Extended | Needs more than $30,000 in outstanding Direct or FFEL loans; up to 25 years |
| RAP | New income-driven plan: percent of income, minus $50 per dependent, minimum $10 a month |
| IBR | 10% or 15% of discretionary income depending on when you got your first loans; never more than the 10-year Standard amount |
| ICR / PAYE | ICR: lesser of 20% of discretionary income or a 12-year fixed amount adjusted by income; PAYE: 10% of discretionary income, capped at the 10-year Standard amount |
The pattern is simple. Fixed plans trade a higher monthly bill for fewer years of interest. Income-driven plans lower the bill when your pay is low, but they usually run longer.
How does the Repayment Assistance Plan (RAP) work?
RAP covers Direct Subsidized, Direct Unsubsidized, Direct PLUS for graduate and professional students, and Direct Consolidation Loans that don’t include a Parent PLUS loan. Your payment is a percentage of annual income (usually AGI) divided by 12, minus $50 per dependent you claim, with a $10 monthly minimum.
| Annual AGI | Share used for RAP |
|---|---|
| Up to $10,000 | $120 a year |
| $10,001 to $20,000 | 1% |
| $20,001 to $30,000 | 2% |
| $30,001 to $40,000 | 3% |
| $40,001 to $50,000 | 4% |
| $50,001 to $60,000 | 5% |
| $60,001 to $70,000 | 6% |
| $70,001 to $80,000 | 7% |
| $80,001 to $90,000 | 8% |
| $90,001 to $100,000 | 9% |
| Over $100,000 | 10% of AGI |
A worked example
Say your AGI is $45,000. That falls in the 4% band, so $1,800 a year, or $150 a month. Claim one dependent and subtract $50. Your payment is $100. At the bottom of the table, $120 a year is the $10 monthly floor.
Interest and paperwork
If your on-time payment is less than the interest accrued that month, the unpaid interest is subsidized for the whole time you’re on RAP. Pay on time with no breaks and your balance won’t rise above its level when you entered RAP. Married borrowers filing jointly use combined income. Those filing separately use only their own. You must authorize IRS data sharing or provide other income documentation.
What happened to IBR, ICR and PAYE?
All three close to you if you receive a new loan, including a new consolidation loan, on or after July 1, 2026. Studentaid.gov says the law “eliminates the ICR and PAYE plans entirely in the future.” Do not consolidate just to chase a plan without checking this rule first. A new consolidation loan can lock you out of IBR.
Does Public Service Loan Forgiveness still apply?
Yes. PSLF forgives the remaining balance on your Direct Loans after the equivalent of 120 qualifying monthly payments (10 years) while you work full-time for an eligible employer. On June 24, 2026, a DC district court preliminarily stayed part of the Education Department’s professional-degree definition. Check the studentaid.gov page for current status.
How do you choose a plan?
- Find your servicer. Studentaid.gov has a page on interest capitalization and finding your servicer.
- Check when each loan was first disbursed. That date limits your options.
- Use studentaid.gov’s repayment tools to compare plans for your balance and income.
Who should pick what?
- Low or uneven income, new loans: RAP. The payment follows your AGI and the interest subsidy stops your balance from growing.
- Stable income, want the debt gone: Tiered Standard, the 10 to 25 year default, or Standard on older loans.
- Parent PLUS or FFEL loans: RAP is closed, so compare the fixed plans and any older income-driven option you still qualify for.
- Public-service job: keep every payment qualifying and watch the PSLF page for the court update.
Questions and answers
Which plan is the default?
For loans disbursed on or after July 1, 2026, it is Tiered Standard, per studentaid.gov.
Can Parent PLUS loans use RAP?
No. Parent PLUS loans, and consolidation loans that repaid one, are not eligible.
What is the lowest RAP payment?
$10 a month. Your payment is also reduced by $50 for each dependent you claim.
Is my RAP payment based on my spouse’s income?
If you file jointly, yes: combined income counts. If you file separately, only your own income counts.
Who gets PSLF forgiveness?
Borrowers with Direct Loans who make 120 qualifying monthly payments (10 years) while working full-time for an eligible employer.
Sources
- StudentAid.gov: repayment plans
- StudentAid.gov: big updates (updated 24 August 2026)
- StudentAid.gov: definitions
Facts last checked on 20 October 2026. Plans are changing.
