Key takeaways
- The SAVE plan is being eliminated. Borrowers must move to another plan or be placed in a standard plan.
- The new Repayment Assistance Plan (RAP) became available on July 1, 2026. Loans made on or after that date can only use RAP or the new Tiered Standard plan.
- Public Service Loan Forgiveness (PSLF) still forgives remaining federal Direct Loans after 120 qualifying payments while working for government or a nonprofit.
- Since July 1, 2026, payments must be made on time to count toward IDR or PSLF forgiveness.
Federal student loan repayment changed more in 2025 and 2026 than in any period in decades. A new law created a new income-driven plan, closed others to new borrowers and changed how Parent PLUS loans work. Here’s where forgiveness stands now and what to do next.
Main forgiveness paths in 2026
| Program | Who it’s for | When the balance is forgiven |
|---|---|---|
| Public Service Loan Forgiveness (PSLF) | Full-time government or 501(c)(3) nonprofit workers with Direct Loans | After 120 qualifying monthly payments (about 10 years) |
| Repayment Assistance Plan (RAP) | Most federal Direct Loan borrowers (not Parent PLUS) | After up to 30 years of qualifying payments |
| Income-Based Repayment (IBR) | Borrowers with loans disbursed before July 1, 2026 | After 20 or 25 years, depending on when you borrowed |
| Teacher Loan Forgiveness | Teachers in low-income schools for 5 years | Up to $5,000 or $17,500 |
| Disability discharge | Borrowers with a total and permanent disability | Upon approval |
| Borrower defense / closed school | Students misled by or whose school closed | Upon approval |
The new Repayment Assistance Plan (RAP)
RAP bases your payment on your adjusted gross income, generally from about 1% to 10% of income, with a minimum payment of about $10 a month and a reduction for each dependent. If your payment doesn’t cover the monthly interest, the unpaid interest is waived, and the government can add a small principal match so your balance goes down. Any remaining balance is forgiven after up to 30 years. Use the Loan Simulator on StudentAid.gov to estimate your payment.
Heads up: many borrowers will pay more under RAP or IBR than they did under SAVE. Compare plans before choosing, especially if you’re pursuing PSLF.
Which plans can you use?
- Loans disbursed before July 1, 2026: RAP, a modified IBR plan (no income eligibility test), or the existing Standard, Graduated or Extended plans.
- Any loan disbursed on or after July 1, 2026: only RAP or the new Tiered Standard plan.
- ICR and PAYE borrowers must switch to an eligible plan by July 1, 2028.
- SAVE borrowers receive a notice to pick a new plan within 90 days. Without a choice, loans go into a standard plan. SAVE forbearance is no longer interest-free.
PSLF in 2026: what to know
- Work full time for a qualifying employer and certify it with the PSLF Help Tool on StudentAid.gov.
- Be on a qualifying repayment plan (RAP, IBR or the 10-year Standard plan). Payments on extended, graduated, tiered standard or consolidation standard plans generally don’t count.
- Make payments on time — after the bill is issued and by the due date.
- Missing months? You may be able to use PSLF Buyback or file a reconsideration request.
Parent PLUS borrowers: important change
Parent PLUS loans aren’t eligible for RAP. If a parent borrower takes out or consolidates any federal loan on or after July 1, 2026, their Parent PLUS loans are limited to the Tiered Standard plan, which removes income-driven repayment and PSLF eligibility. Talk to your servicer before consolidating.
Is forgiveness taxable?
PSLF forgiveness is not taxed by the federal government. The temporary rule that made other income-driven forgiveness tax-free ended after 2025, so forgiveness under RAP or IBR may count as taxable income unless Congress changes the rule. Some states also tax forgiven debt. Plan ahead with a tax professional.
What to do now
- Log in to StudentAid.gov to see your loan types, dates and payment count.
- Use the Loan Simulator to compare RAP, IBR and Standard payments.
- Set up autopay — it helps you pay on time and some servicers offer a small rate discount.
- Beware of companies charging fees to “get your loans forgiven.” Applying through StudentAid.gov is free.
Struggling with other debts too? See how to prioritize debt repayments and our guide to managing student loan debt.
Frequently asked questions
Is the SAVE plan gone?
Yes. SAVE is being eliminated under a court settlement, and borrowers are being moved to other plans.
Can I still get PSLF?
Yes. PSLF continues for Direct Loan borrowers who work for qualifying employers and make 120 qualifying payments.
Do private student loans qualify for forgiveness?
No. Federal forgiveness programs apply only to federal loans. Refinancing federal loans into a private loan gives up these options.
Will my credit score drop if I’m behind?
Yes. Federal loans 90 or more days past due can be reported to the credit bureaus. See our credit score guide.
Information reflects U.S. Department of Education guidance and state borrower-assistance resources as of fall 2026. Rules can change. This article is for educational purposes and isn’t legal, tax or financial advice. Confirm details with your servicer or StudentAid.gov.
Written by Chanchala
Founder & Lead Writer · B.Sc. Mathematics (Honors) · 9 years in banking & lending
Chanchala is the founder and lead writer of FinInfoBlog. She holds a B.Sc. in Mathematics (Honors) and has 9 years of experience in banking and lending. She writes plain-English guides on savings, CDs, loans, credit and personal finance for U.S. readers, and makes sure every example shows the math behind the money decision. How we research and fact-check.