{ "name": "Federal student-loan repayment rules, 2026", "description": "RAP, IBR, Tiered Standard, legacy plans, PSLF, residency rules, borrowing caps and 2026–27 interest rates, with the statute or regulation behind each parameter.", "source": "https://www.joinandwise.com/loans/repayment", "license": "https://creativecommons.org/licenses/by/4.0/", "attribution": "Andwise (https://www.joinandwise.com)", "citation": "Andwise, \"Federal student-loan repayment rules, 2026\" (2026-10-21). https://www.joinandwise.com/loans/repayment", "lastVerified": "2026-10-21", "scope": "Federal Direct Loans (FFEL, Perkins and HEAL are out of scope)", "note": "Numbers change by statute, regulation and annual announcement. `scheduledChanges` lists known future dates; check `asOf` before relying on any figure.", "count": 12, "data": { "asOf": "2026-10-21", "schemaVersion": 1, "notes": "Federal Direct Loan repayment parameters in effect on 2026-10-21. Primary sources: Public Law 119-21 (signed 2025-07-04; ED now calls it the Working Families Tax Cuts Act), HEA sec. 455 (20 U.S.C. 1087e) and sec. 493C (20 U.S.C. 1098e) as amended, the RISE final rule (91 FR 23768, 2026-05-01, effective 2026-07-01), 34 CFR part 685 (eCFR current to 2026-10-19), and studentaid.gov / ed.gov. Every value has a source in docs/research/loan-rules-2026.md. FFEL, Perkins and HEAL loans are out of scope: they cannot be repaid under RAP or Tiered Standard.", "conventions": { "agiBrackets": "Each RAP bracket covers AGI greater than minAgiExclusive and at most maxAgiInclusive. A null bound is open. The bracket rate applies to the borrower's whole AGI, not just the slice inside the bracket, so the payment jumps at each $10,000 boundary.", "balanceTiers": "Each Tiered Standard tier covers principal at least minBalanceInclusive and below maxBalanceExclusive. A null bound is open.", "money": "Dollar amounts are nominal US dollars. Rates are decimals (0.10 = 10%).", "rounding": "No statute or regulation sets a rounding rule for RAP. ED's published RAP table rounds to the nearest cent (for example, $60,001 AGI shows $300.01)." }, "sources": { "publicLaw119_21": "https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm", "usc1087e": "https://www.law.cornell.edu/uscode/text/20/1087e", "usc1098e": "https://www.law.cornell.edu/uscode/text/20/1098e", "riseFinalRule": "https://www.federalregister.gov/documents/2026/05/01/2026-08556/reimagining-and-improving-student-education-federal-student-loan-program-final-regulations", "riseFinalRuleText": "https://www.govinfo.gov/content/pkg/FR-2026-05-01/html/2026-08556.htm", "riseNprm": "https://www.federalregister.gov/documents/2026/01/30/2026-01912/reimagining-and-improving-student-education", "cfr685_102": "https://www.ecfr.gov/current/title-34/section-685.102", "cfr685_200": "https://www.ecfr.gov/current/title-34/section-685.200", "cfr685_202": "https://www.ecfr.gov/current/title-34/section-685.202", "cfr685_203": "https://www.ecfr.gov/current/title-34/section-685.203", "cfr685_204": "https://www.ecfr.gov/current/title-34/section-685.204", "cfr685_205": "https://www.ecfr.gov/current/title-34/section-685.205", "cfr685_207": "https://www.ecfr.gov/current/title-34/section-685.207", "cfr685_208": "https://www.ecfr.gov/current/title-34/section-685.208", "cfr685_209": "https://www.ecfr.gov/current/title-34/section-685.209", "cfr685_210": "https://www.ecfr.gov/current/title-34/section-685.210", "cfr685_219": "https://www.ecfr.gov/current/title-34/section-685.219", "cfr685_220": "https://www.ecfr.gov/current/title-34/section-685.220", "hhsPoverty2026": "https://www.federalregister.gov/documents/2026/01/15/2026-00755/annual-update-of-the-hhs-poverty-guidelines", "pslfEmployerRule2025": "https://www.federalregister.gov/documents/2025/10/31/2025-19729/william-d-ford-federal-direct-loan-direct-loan-program", "saObbbaUpdates": "https://studentaid.gov/announcements-events/big-updates", "saObbbaDefinitions": "https://studentaid.gov/announcements-events/big-updates/definitions", "saIdrCourtActions": "https://studentaid.gov/announcements-events/idr-court-actions", "saIdrFaq": "https://studentaid.gov/articles/faqs-idr-plan/", "saInterestRates": "https://studentaid.gov/understand-aid/types/loans/interest-rates", "saForbearance": "https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/forbearance", "edSavePressRelease": "https://www.ed.gov/about/news/press-release/us-department-of-education-announces-next-steps-borrowers-enrolled-unlawful-save-plan", "edAutopayPressRelease": "https://www.ed.gov/about/news/press-release/us-department-of-education-announces-student-loan-interest-rate-reduction", "crsPslfLegalSidebar": "https://www.everycrsreport.com/reports/LSB11472.html", "secondaryStudentLoanPlannerRap": "https://www.studentloanplanner.com/repayment-assistance-plan/", "secondaryDwtPslfVacatur": "https://www.dwt.com/insights/2026/07/federal-courts-vacate-pslf-regulations" }, "povertyGuidelines2026": { "formula": "guideline = base + perPerson * familySize (equivalently onePerson + perPerson * (familySize - 1)); the 2026 tables are exactly linear for every listed size and the notice says to add perPerson for each person above 8", "effectiveDate": "2026-01-13", "contiguous": { "base": 10280, "perPerson": 5680, "onePerson": 15960, "fourPerson": 33000, "appliesTo": "48 contiguous states, DC, and any borrower not resident in a listed state" }, "alaska": { "base": 12850, "perPerson": 7100, "onePerson": 19950, "fourPerson": 41250 }, "hawaii": { "base": 11830, "perPerson": 6530, "onePerson": 18360, "fourPerson": 37950 }, "usedBy": [ "IBR", "PAYE", "ICR", "economicHardshipDeferment" ], "notUsedBy": [ "RAP", "TieredStandard" ], "nextUpdate": "HHS publishes each January; servicers apply the guideline current when the payment is calculated.", "sources": [ "https://www.federalregister.gov/documents/2026/01/15/2026-00755/annual-update-of-the-hhs-poverty-guidelines", "https://www.ecfr.gov/current/title-34/section-685.209" ] }, "rap": { "name": "Repayment Assistance Plan", "availableFrom": "2026-07-01", "statute": "HEA 455(q), 20 U.S.C. 1087e(q), added by Pub. L. 119-21 sec. 82001(d)", "regulation": "34 CFR 685.209 (a)(5), (b)(2)-(3), (e), (f)(5), (g)(3), (h)(4), (k)(7)-(8), (o)", "eligibleLoans": [ "Direct Subsidized", "Direct Unsubsidized", "Direct PLUS (graduate/professional)", "Direct Consolidation that did not repay a parent PLUS loan" ], "ineligibleLoans": [ "Direct PLUS made to a parent", "Consolidation loans that repaid a parent PLUS (including double consolidation)", "FFEL, Perkins, HEAL (not Direct Loans)" ], "eligibleBorrowers": "Any Direct Loan borrower with eligible loans, whether the loans were disbursed before or after 2026-07-01. Defaulted loans: 34 CFR 685.209(d)(4) lists them as eligible, but studentaid.gov says defaulted loans must first be rehabilitated or consolidated.", "incomeMeasure": { "measure": "AGI", "definition": "Adjusted gross income (IRC sec. 62) for the most recent taxable year.", "marriedFilingJointly": "Combined AGI of borrower and spouse, unless the borrower certifies separation or inability to reasonably access the spouse's income.", "marriedFilingSeparately": "Borrower's AGI only.", "alternativeDocumentation": "If AGI is unavailable or does not reasonably reflect current income, the borrower supplies other income documentation (statute 455(q)(3); 34 CFR 685.209(l)(6)).", "familySizeAdjustment": false, "stateAdjustment": false }, "brackets": [ { "minAgiExclusive": null, "maxAgiInclusive": 10000, "rate": null, "annualBasePayment": 120 }, { "minAgiExclusive": 10000, "maxAgiInclusive": 20000, "rate": 0.01 }, { "minAgiExclusive": 20000, "maxAgiInclusive": 30000, "rate": 0.02 }, { "minAgiExclusive": 30000, "maxAgiInclusive": 40000, "rate": 0.03 }, { "minAgiExclusive": 40000, "maxAgiInclusive": 50000, "rate": 0.04 }, { "minAgiExclusive": 50000, "maxAgiInclusive": 60000, "rate": 0.05 }, { "minAgiExclusive": 60000, "maxAgiInclusive": 70000, "rate": 0.06 }, { "minAgiExclusive": 70000, "maxAgiInclusive": 80000, "rate": 0.07 }, { "minAgiExclusive": 80000, "maxAgiInclusive": 90000, "rate": 0.08 }, { "minAgiExclusive": 90000, "maxAgiInclusive": 100000, "rate": 0.09 }, { "minAgiExclusive": 100000, "maxAgiInclusive": null, "rate": 0.1 } ], "bracketRateAppliesTo": "entireAgi", "paymentSpread": "The annual base payment is divided by 12 to give the monthly amount.", "perDependentMonthlyReduction": 50, "dependentDefinition": "An individual who is a dependent under IRC sec. 152 and is claimed on the borrower's federal return. If married filing separately, only dependents claimed on the borrower's own return count. A spouse is not a dependent under sec. 152.", "minimumMonthly": 10, "spousalDebtProration": { "appliesWhen": "Spouse's income is included (married filing jointly) and the spouse also has RAP-eligible loans.", "rule": "Multiply the borrower's RAP payment by (borrower's eligible principal and interest balance / couple's combined eligible balance).", "minimumAfterProration": 10, "source": "34 CFR 685.209(e)(2)(i), (g)(3); not in the statute (ED chose proration; see the final rule's alternatives discussion at 91 FR 23865-23866)." }, "paymentFormula": "monthly = max(10, ((annualBasePayment(AGI) / 12) - 50 * dependents) * spouseDebtShare); spouseDebtShare = 1 unless spousalDebtProration applies; if the remaining balance is below this amount, the payment equals the remaining balance.", "finalPaymentRule": "If the outstanding balance is less than the calculated payment, the payment is the outstanding balance.", "nonCompliancePayment": "If the borrower does not provide required income information, the payment becomes the 10-year standard amount based on the balance when the loans entered repayment, until the information is provided.", "paymentApplicationOrder": [ "interest", "fees", "principal" ], "onTimeDefinition": "Received on or before the current month's due date and after the previous month's due date, in full. A payment made to cure delinquency is not on time. Paying ahead advances the due date and forfeits the interest benefit and match for the skipped months unless the borrower opts out of advancing the due date.", "interestTreatment": "waived", "interestTreatmentDetail": "For each month with an on-time full payment that does not cover that month's accrued interest, the unpaid interest is not charged to the borrower (statute 455(q)(2)(A)). It applies to subsidized and unsubsidized loans for the whole time in RAP. It does not cover interest that accrued before entering RAP or during deferment, forbearance, or other non-repayment periods.", "principalMatch": { "maxMonthly": 50, "formula": "If an on-time full payment reduces total RAP principal by less than $50, ED reduces principal by min(50, amountPaid) - principalPortionOfPayment.", "conditions": [ "Payment is on time and in full", "Borrower is not in deferment or forbearance", "Payment did not advance the due date (paid-ahead months get no match)", "Amounts paid to cure delinquency do not count" ], "effect": "Total principal falls by at least min($50, amount paid) each qualifying month." }, "deferredPrincipal": "Principal due and not paid is deferred.", "capitalization": "Unpaid accrued interest capitalizes only under 34 CFR 685.202(b) (after a deferment on unsubsidized loans).", "forgivenessAfterPayments": 360, "forgivenessMinimumYears": 30, "forgivenessConditions": [ "Participated in RAP at some point", "Most recent payment before cancellation was made under RAP", "360 qualifying monthly payments" ], "qualifyingMonthsTowardForgiveness": [ "On-time RAP payment", "On-time Tiered Standard payment of at least the required amount", "Payment under any other plan (excluding RAP) of at least the 10-year standard amount", "IBR payment of at least the required IBR amount, including the IBR minimum", "PAYE or ICR payment made before 2028-07-01 of at least the required amount (ICR alternative plan also counts before 2028-07-01)", "Month in unemployment or economic hardship deferment", "Certain pre-cutoff deferment/forbearance months listed in 34 CFR 685.209(k)(4)(iv); statute cutoff is months ending before 2025-07-04, regulation says before 2026-07-01 (see openQuestions)" ], "creditTransfer": "Progress earned under IBR/PAYE/ICR before entering RAP counts toward RAP's 360. RAP payments do not count toward IBR, PAYE, or ICR discharge if the borrower later switches back (they do still count for PSLF).", "pslfQualifying": true, "pslfCondition": "Only on-time, in-full RAP payments count. Under RAP, months in any deferment or forbearance never count toward PSLF, and PSLF buyback is unavailable for RAP periods.", "forgivenessTaxable": "Federally taxable for discharges after 2025-12-31; PSLF discharge is not.", "planSwitching": "May switch between RAP and Tiered Standard at any time. Borrowers with only pre-2026-07-01 loans may also switch back to IBR/PAYE/ICR while those plans remain open to them.", "sources": [ "https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm", "https://www.law.cornell.edu/uscode/text/20/1087e", "https://www.ecfr.gov/current/title-34/section-685.209", "https://www.federalregister.gov/documents/2026/05/01/2026-08556/reimagining-and-improving-student-education-federal-student-loan-program-final-regulations", "https://studentaid.gov/announcements-events/big-updates/definitions", "https://studentaid.gov/announcements-events/big-updates" ] }, "ibr": { "name": "Income-Based Repayment", "statute": "HEA 493C, 20 U.S.C. 1098e, as amended by Pub. L. 119-21 sec. 82001(f)", "newBorrowerRate": 0.1, "oldBorrowerRate": 0.15, "newBorrowerDefinition": "No outstanding Direct or FFEL balance as of 2014-07-01, or no outstanding balance on the date a loan was obtained after 2014-07-01 (and before 2026-07-01).", "povertyMultiplier": 1.5, "discretionaryIncome": "max(0, AGI - 1.5 * povertyGuideline(familySize, state))", "monthlyPaymentFormula": "min(rate * discretionaryIncome / 12, capAtStandard10yrAmount) * spouseDebtShare, then: below $5 becomes $0; $5 to under $10 becomes $10", "capAtStandard10yr": true, "capBasis": "10-year standard payment computed on the eligible balances and interest rates when the borrower first entered IBR.", "smallPaymentRule": { "below5": 0, "from5ToUnder10": 10 }, "incomeMeasure": { "measure": "AGI", "marriedFilingJointly": "Combined AGI; payment prorated by borrower's share of the couple's eligible loan balance when the spouse has eligible loans.", "marriedFilingSeparately": "Borrower's AGI and borrower's loans only (statute 493C(d))." }, "familySize": "Borrower; spouse if married filing jointly (current regulation); children receiving over half their support from the borrower; other dependents living with the borrower. See openQuestions on spouse treatment for married filing separately.", "forgivenessYears": { "new": 20, "old": 25 }, "forgivenessPayments": { "new": 240, "old": 300 }, "forgivenessTaxable": "Federally taxable for discharges after 2025-12-31.", "hardshipRequired": false, "hardshipRemoval": "Pub. L. 119-21 struck the partial-financial-hardship requirement effective 2025-07-04; ED systems began enrolling borrowers without a hardship on 2025-12-22.", "interestTreatment": "Unpaid interest accrues. On subsidized loans ED pays unpaid interest for the first 3 years (excluding economic hardship deferment). ED says that starting spring 2027 the subsidy requires on-time, in-full payments.", "capitalization": "Unpaid interest capitalizes when the borrower leaves IBR or begins paying the capped standard amount.", "eligibility": "Loans made before 2026-07-01, for a borrower who has received no Direct Loan (including a consolidation loan) made on or after 2026-07-01. Defaulted loans: ED says defaulted loans are not eligible for any IDR plan after the 2026-03-10 court order, though the regulation still lists them.", "eligibilityAfterNewLoan": "If any Direct Loan is first disbursed on or after 2026-07-01, the pre-2026 loans may stay in IBR only while the new loan is not yet in repayment (e.g., in-school deferment). When the new loan enters repayment, all loans must move to RAP or Tiered Standard; if the borrower does not choose, the servicer places all loans in Tiered Standard.", "eligibilityAfterConsolidation": "A Direct Consolidation Loan made on or after 2026-07-01 may be repaid only under Tiered Standard or RAP, so consolidating on or after that date ends IBR access.", "leavingIbr": "A borrower leaving IBR goes to the standard plan or RAP.", "pslfQualifying": true, "sources": [ "https://www.law.cornell.edu/uscode/text/20/1098e", "https://www.law.cornell.edu/uscode/text/20/1087e", "https://www.ecfr.gov/current/title-34/section-685.209", "https://www.ecfr.gov/current/title-34/section-685.210", "https://studentaid.gov/announcements-events/big-updates", "https://studentaid.gov/announcements-events/idr-court-actions" ] }, "tieredStandard": { "name": "Tiered Standard repayment plan", "availableFrom": "2026-07-01", "statute": "HEA 455(d)(7)(A)(i), 20 U.S.C. 1087e(d)(7)(A)(i)", "who": "Required option (with RAP) for any borrower with a Direct Loan made on or after 2026-07-01, covering all of that borrower's Direct Loans. Not available to borrowers whose loans were all made before 2026-07-01. Default plan for borrowers with post-2026 loans who do not choose.", "tierBasis": "Total outstanding principal of all the borrower's Direct Loans (made before, on, or after 2026-07-01) when entering repayment under the plan. ED recalculates the term if loans are added or the borrower leaves and returns.", "tiers": [ { "minBalanceInclusive": 0, "maxBalanceExclusive": 25000, "years": 10 }, { "minBalanceInclusive": 25000, "maxBalanceExclusive": 50000, "years": 15 }, { "minBalanceInclusive": 50000, "maxBalanceExclusive": 100000, "years": 20 }, { "minBalanceInclusive": 100000, "maxBalanceExclusive": null, "years": 25 } ], "paymentType": "Fixed monthly payment that fully amortizes the balance over the tier's term at the loans' interest rates.", "minimumMonthly": 50, "pslfQualifying": false, "pslfNote": "ED states Tiered Standard payments never count for PSLF or TEPSLF, including in the 10-year tier.", "countsTowardRapForgiveness": true, "parentPlusRule": "Parent PLUS loans and consolidations that include them, if the borrower has any loan made on or after 2026-07-01, may be repaid only under Tiered Standard.", "sources": [ "https://www.law.cornell.edu/uscode/text/20/1087e", "https://www.ecfr.gov/current/title-34/section-685.208", "https://www.ecfr.gov/current/title-34/section-685.210", "https://studentaid.gov/announcements-events/big-updates/definitions" ] }, "legacyPlans": { "save": { "status": "ended", "detail": "ED and Missouri announced a settlement in December 2025; a federal court entered the order ending SAVE on 2026-03-10. No new enrollments; pending applications denied. Servicers began sending notices on 2026-07-01, each giving the borrower at least 90 days to choose a plan. Borrowers who do not choose are placed in the Standard plan (pre-2026 loans) or Tiered Standard.", "switchDeadline": "Borrower-specific: at least 90 days from that borrower's servicer notice (notices began 2026-07-01).", "modelInCalculator": false, "sources": [ "https://www.ed.gov/about/news/press-release/us-department-of-education-announces-next-steps-borrowers-enrolled-unlawful-save-plan", "https://studentaid.gov/announcements-events/idr-court-actions" ] }, "paye": { "status": "closing", "rate": 0.1, "povertyMultiplier": 1.5, "capAtStandard10yr": true, "forgivenessYears": 20, "lastDay": "2028-06-30", "eligibility": "Borrowers with only pre-2026-07-01 Direct Loans who meet PAYE's new-borrower test. See openQuestions on whether new PAYE enrollment requires having been on PAYE on 2024-07-01.", "transition": "Borrowers in PAYE must choose RAP, IBR, or a fixed plan before 2028-07-01; non-choosers go to RAP (or IBR for RAP-ineligible loans) on 2028-07-01. PAYE payments made by 2028-06-30 count toward IBR and RAP forgiveness.", "pslfQualifying": true, "sources": [ "https://www.ecfr.gov/current/title-34/section-685.209", "https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm", "https://studentaid.gov/articles/faqs-idr-plan/" ] }, "icr": { "status": "closing", "formula": "Lesser of 20% of (AGI - 1.0 * poverty guideline) / 12, or a 12-year amortized payment multiplied by ED's annual income percentage factor", "forgivenessYears": 25, "lastDay": "2028-06-30", "statutoryRepeal": "HEA 455(e) repealed effective 2028-07-01.", "transition": "Same as PAYE.", "pslfQualifying": "Payments made on or before 2028-06-30", "sources": [ "https://www.ecfr.gov/current/title-34/section-685.209", "https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm" ] }, "standard10yr": { "who": "Borrowers whose Direct Loans were all made before 2026-07-01 and who have no Direct Loan made on or after that date.", "years": 10, "minimumMonthly": 50, "pslfQualifying": true, "sources": [ "https://www.ecfr.gov/current/title-34/section-685.208" ] }, "consolidationStandardPre2026": { "who": "Direct Consolidation Loans made before 2026-07-01, borrower with no post-2026 loans.", "tiers": [ { "minBalanceInclusive": 0, "maxBalanceExclusive": 7500, "years": 10 }, { "minBalanceInclusive": 7500, "maxBalanceExclusive": 10000, "years": 12 }, { "minBalanceInclusive": 10000, "maxBalanceExclusive": 20000, "years": 15 }, { "minBalanceInclusive": 20000, "maxBalanceExclusive": 40000, "years": 20 }, { "minBalanceInclusive": 40000, "maxBalanceExclusive": 60000, "years": 25 }, { "minBalanceInclusive": 60000, "maxBalanceExclusive": null, "years": 30 } ], "pslfQualifying": "Only if the payment is at least the 10-year standard amount", "sources": [ "https://www.ecfr.gov/current/title-34/section-685.208" ] }, "graduated": { "who": "Pre-2026 loans, no post-2026 loans", "years": 10, "detail": "Payments at two or more levels; no single payment more than 3x any other. Consolidation version uses the consolidation tiers up to 30 years.", "pslfQualifying": "Only months where the payment is at least the 10-year standard amount", "sources": [ "https://www.ecfr.gov/current/title-34/section-685.208" ] }, "extended": { "who": "Pre-2026 loans, no post-2026 loans, more than $30,000 in Direct Loans (for borrowers entering repayment on or after 2006-07-01)", "years": 25, "pslfQualifying": "Only if the payment is at least the 10-year standard amount", "sources": [ "https://www.ecfr.gov/current/title-34/section-685.208" ] } }, "pslf": { "payments": 120, "statute": "HEA 455(m), 20 U.S.C. 1087e(m), as amended by Pub. L. 119-21 sec. 82004", "eligibleLoans": "Direct Loans only (Subsidized, Unsubsidized, PLUS, Consolidation), not in default", "employment": "Full-time (average at least 30 hours/week) with a qualifying employer for each counted month and at the time of application and forgiveness", "qualifyingEmployers": [ "US federal, state, local, or tribal government organization", "501(c)(3) tax-exempt organization", "Public child or family service agency", "Tribal college or university", "Certain other non-profits providing qualifying public services (not unions or partisan groups)" ], "qualifyingPlans": [ "RAP (on-time, in-full payments only)", "IBR", "PAYE (payments through 2028-06-30)", "ICR (payments through 2028-06-30)", "10-year Standard (pre-2026 loans)", "Any other plan except the alternative plan, when the payment is at least the 10-year standard amount" ], "nonQualifyingPlans": [ "Tiered Standard (ED position)", "Extended, Graduated, or consolidation Standard when the payment is below the 10-year standard amount", "SAVE forbearance months (ended)" ], "deferForbearCredit": "Outside RAP, months in cancer treatment, economic hardship, military, or post-active-duty deferment, and AmeriCorps, National Guard, DoD repayment, or certain administrative forbearances count. Under RAP, no deferment or forbearance month counts. Residency forbearance never counts.", "taxable": false, "employerRule2025": { "rule": "Final rule published 2025-10-31 (effective 2026-07-01) excluding employers ED finds to have a 'substantial illegal purpose'; restated in full in the RISE final rule (2026-05-01).", "status": "vacated", "detail": "On 2026-06-30 the U.S. District Courts for the District of Massachusetts and the District of Columbia entered final judgments vacating the rule. ED amended the PSLF form (Federal Register notice 2026-07-13) to comply. The Secretary appealed both judgments on 2026-08-27; the appeals were pending as of the CRS update of 2026-08-31.", "calculatorImpact": "None today; employer eligibility is a user input." }, "sources": [ "https://www.law.cornell.edu/uscode/text/20/1087e", "https://www.ecfr.gov/current/title-34/section-685.219", "https://studentaid.gov/announcements-events/big-updates", "https://www.federalregister.gov/documents/2025/10/31/2025-19729/william-d-ford-federal-direct-loan-direct-loan-program", "https://www.everycrsreport.com/reports/LSB11472.html" ] }, "residency": { "gracePeriodMonths": 6, "graceDetail": "Six-month grace on Direct Subsidized and Unsubsidized loans after dropping below half-time. Grad PLUS has no grace period but an in-school deferment that includes a 6-month post-enrollment period. Unsubsidized interest accrues during grace.", "forbearance": "Mandatory forbearance for a medical or dental internship or residency (34 CFR 685.205(a)(3)), granted up to 12 months at a time and renewable for the length of training.", "forbearanceInterest": "accrues", "forbearanceCapitalization": "Not capitalized at the end of forbearance for ED-held Direct Loans (capitalization occurs only after deferment on unsubsidized loans or on leaving IBR).", "forbearanceCountsTowardPslf": false, "forbearanceCountsTowardRapOrIdr": false, "forbearanceCapForNewLoans": "Loans disbursed on or after 2027-07-01 face a 9-months-in-24 cap on general (discretionary) forbearance under 685.205(a)(1); the residency forbearance under 685.205(a)(3) is not subject to that cap.", "paymentsDuringResidency": "On-time RAP payments, or required IBR/PAYE payments, made while employed full-time by a qualifying employer count toward PSLF and toward plan forgiveness. RAP and IBR use the most recent tax year's AGI, so the first year of residency is usually priced on the final student year's AGI unless the borrower submits current income.", "economicHardshipDeferment": "Available (up to 3 years total) for loans disbursed before 2027-07-01 if monthly income (gross, or 1/12 of AGI on the most recent return) is at or below the greater of the federal minimum wage measure or 150% of the poverty guideline. Months count toward RAP's 360 and, outside RAP, toward PSLF. Not available for loans disbursed on or after 2027-07-01. Unsubsidized interest capitalizes when the deferment ends.", "consolidationTrap": "Consolidating on or after 2026-07-01 (for example, to end the grace period early) produces a loan repayable only under RAP or Tiered Standard.", "sources": [ "https://www.ecfr.gov/current/title-34/section-685.205", "https://www.ecfr.gov/current/title-34/section-685.204", "https://www.ecfr.gov/current/title-34/section-685.207", "https://www.ecfr.gov/current/title-34/section-685.202", "https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/forbearance", "https://studentaid.gov/understand-aid/types/loans/interest-rates" ] }, "borrowingLimits": { "effectiveFrom": "2026-07-01", "gradPlus": "Not available to graduate or professional students for periods of instruction beginning on or after 2026-07-01, except under the interim exception.", "professional": { "annualUnsubsidized": 50000, "aggregateUnsubsidized": 200000, "aggregateNote": "Excludes undergraduate borrowing; reduced by any amount borrowed as a graduate (non-professional) student." }, "graduate": { "annualUnsubsidized": 20500, "aggregateUnsubsidized": 100000, "aggregateNote": "For students who are not and have never been professional students; excludes undergraduate borrowing." }, "lifetimeMaximum": 257500, "lifetimeNote": "All title IV loans the person borrowed as a student (undergraduate, graduate, professional, including Grad PLUS); excludes parent PLUS borrowed as a parent; amounts repaid or forgiven still count.", "parentPlus": { "annualPerStudent": 20000, "aggregatePerStudent": 65000 }, "lessThanFullTime": "Annual limits reduced in proportion to enrollment.", "institutionalLimits": "Schools may set lower limits applied consistently to a program.", "professionalDegreeIncludes": [ "Medicine (M.D.)", "Osteopathic Medicine (D.O.)", "Dentistry", "Pharmacy", "Veterinary Medicine", "Optometry", "Podiatry", "Chiropractic", "Law", "Theology", "Clinical Psychology" ], "professionalDefinitionLitigation": "On 2026-06-24 the U.S. District Court for D.C. preliminarily stayed part of ED's professional-degree definition; ED's list changed for other fields. M.D. and D.O. remain professional degrees.", "interimException": { "who": "Enrolled in a program as of 2026-06-30 and received a Direct Loan for that program before 2026-07-01.", "benefit": "Pre-2026 limits continue, including Grad PLUS, the $138,500 graduate aggregate (which includes undergraduate loans), and the higher health-professions unsubsidized limits.", "duration": "Lesser of 3 academic years or the remaining published program length; no later than the 2028-29 award year (new limits apply in 2029-30 at the latest).", "lostIf": "The student stops being enrolled in the same program, credential, and school (an approved leave of absence is not a break). The exception cannot be waived.", "repaymentEffect": "Loans borrowed under the exception on or after 2026-07-01 are still post-2026 loans: they move all of the borrower's loans to RAP or Tiered Standard when they enter repayment." }, "sources": [ "https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm", "https://www.ecfr.gov/current/title-34/section-685.203", "https://www.ecfr.gov/current/title-34/section-685.200", "https://www.ecfr.gov/current/title-34/section-685.102", "https://www.govinfo.gov/content/pkg/FR-2026-05-01/html/2026-08556.htm", "https://studentaid.gov/announcements-events/big-updates/definitions" ] }, "interestRates2026_27": { "firstDisbursedFrom": "2026-07-01", "firstDisbursedBefore": "2027-07-01", "undergraduateSubUnsub": 0.0652, "graduateProfessionalUnsub": 0.0807, "plus": 0.0907, "fixed": true, "loanFees": { "subUnsub": 0.01057, "plus": 0.04228, "validForFirstDisbursementBefore": "2027-10-01" }, "priorYearsGraduateUnsub": { "2025-26": 0.0794, "2024-25": 0.0808, "2023-24": 0.0705, "2022-23": 0.0654, "2021-22": 0.0528, "2020-21": 0.043, "2019-20": 0.0608, "2018-19": 0.066, "2017-18": 0.06, "2016-17": 0.0531, "2015-16": 0.0584, "2014-15": 0.0621, "2013-14": 0.0541 }, "priorYearsPlus": { "2025-26": 0.0894, "2024-25": 0.0908, "2023-24": 0.0805, "2022-23": 0.0754, "2021-22": 0.0628, "2020-21": 0.053, "2019-20": 0.0708, "2018-19": 0.076, "2017-18": 0.07, "2016-17": 0.0631, "2015-16": 0.0684, "2014-15": 0.0721, "2013-14": 0.0641 }, "autopayDiscount": { "standard": 0.0025, "temporary": 0.01, "temporaryFrom": "2026-07-01", "temporaryThrough": "2028-06-30", "enrollBy": "2026-12-31", "eligibleLoans": "Direct Loans disbursed on or after 2012-07-01 (ED: 'originated after July 1, 2012'); not FFEL, HEAL, or Perkins", "condition": "Borrower must stay enrolled in auto pay and in repayment.", "authority": "HEA 455(b)(9)(C), 20 U.S.C. 1087e(b)(9)(C), lets the Secretary reduce the rate for borrowers on automatic debit for loans first disbursed on or after 2012-07-01. The size and dates come from ED's 2026-06-18 announcement, not from statute or regulation." }, "consolidationRate": "Weighted average of the rates on the loans consolidated, rounded up to the nearest 1/8 of 1%, with no cap (HEA 455(b)(8)(D)).", "statutoryFormula": "Rate = final 10-year Treasury high yield auctioned before June 1, plus 2.05 points (undergraduate, cap 8.25%), 3.6 points (graduate Unsubsidized, cap 9.5%), or 4.6 points (PLUS, cap 10.5%) (HEA 455(b)(8)).", "sources": [ "https://studentaid.gov/understand-aid/types/loans/interest-rates", "https://www.ed.gov/about/news/press-release/us-department-of-education-announces-student-loan-interest-rate-reduction", "https://studentaid.gov/announcements-events/idr-court-actions" ] }, "scheduledChanges": [ { "date": "2026-12-31", "change": "Last day to enroll in auto pay and receive the temporary 1% rate reduction (ED extended this from 2026-09-30).", "source": "https://studentaid.gov/announcements-events/idr-court-actions" }, { "date": "2027-01", "change": "HHS publishes 2027 poverty guidelines (affects IBR/PAYE/ICR, not RAP).", "source": "https://www.federalregister.gov/documents/2026/01/15/2026-00755/annual-update-of-the-hhs-poverty-guidelines" }, { "date": "2027 (spring)", "change": "ED says IBR and PAYE interest subsidy will require on-time, in-full payments.", "source": "https://studentaid.gov/announcements-events/big-updates/definitions" }, { "date": "2027-07-01", "change": "For loans disbursed on or after this date: no unemployment or economic hardship deferment; general forbearance capped at 9 months per 24. Rehabilitation allowed twice; $10 minimum rehabilitation payment for new Direct Loans.", "source": "https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm" }, { "date": "2027-07-01", "change": "New fixed interest rates for 2027-28 disbursements (set from the May 2027 10-year Treasury auction).", "source": "https://studentaid.gov/understand-aid/types/loans/interest-rates" }, { "date": "2027-10-01", "change": "Published loan-fee percentages expire for first disbursements on or after this date.", "source": "https://studentaid.gov/understand-aid/types/loans/interest-rates" }, { "date": "2028-06-30", "change": "Last day of PAYE and ICR; last day ICR/PAYE payments count toward RAP/IBR/PSLF; temporary 1% auto-pay reduction ends.", "source": "https://www.ecfr.gov/current/title-34/section-685.209" }, { "date": "2028-07-01", "change": "Borrowers still in PAYE/ICR (or related forbearance) who did not choose are moved to RAP, or IBR for RAP-ineligible loans. HEA 455(e) repealed.", "source": "https://www.govinfo.gov/content/pkg/PLAW-119publ21/html/PLAW-119publ21.htm" }, { "date": "2029-07-01", "change": "Interim exception ends for everyone at the latest (2029-30 award year); Grad PLUS fully gone.", "source": "https://studentaid.gov/announcements-events/big-updates" } ], "openQuestions": [ "PSLF employer rule: vacated 2026-06-30 by D. Mass. and D.D.C., appealed 2026-08-27. An appellate reversal could revive the 'substantial illegal purpose' exclusion. The RISE rule's restatement of 685.219 still appears in the eCFR.", "RAP qualifying deferment/forbearance months: the statute (455(q)(1)(F)(vii)) counts listed deferment/forbearance months that ended before enactment (2025-07-04); 34 CFR 685.209(k)(8)(C)(8) says months that ended before 2026-07-01. Which cutoff ED applies is unconfirmed.", "Tiered Standard and PSLF: ED says Tiered Standard never qualifies. HEA 455(m)(1)(A)(iii) counts payments of at least the 10-year standard amount under (d)(1) or (g) plans; whether a 10-year-tier Tiered Standard payment could qualify is untested.", "34 CFR 685.219(b)(28)(ii) cites a 'consolidation loan standard repayment plan with a 10-year repayment term under 685.208(c)', but 685.208(c) is now Tiered Standard; this looks like a drafting error.", "PAYE new enrollment: the eCFR still requires having been on PAYE on 2024-07-01 (a 2023-rule provision), while studentaid.gov says eligible borrowers can apply for PAYE after the 2026-03-10 court order invalidated most of the 2023 rule.", "IBR family size for married-filing-separately borrowers: current regulation counts the spouse only on a joint return (2023-rule language re-adopted in the RISE rule); the pre-2023 rule counted the spouse regardless. ED's servicer practice is unconfirmed.", "Weighted-average credit for payments made before consolidation: studentaid.gov says the court order invalidated it for IDR purposes, while 685.209(k)(4)(vi) and 685.219(c)(3) still contain it.", "RAP edge cases ED says it will clarify 'in the near future': overpayments and the interest subsidy, overpayments and the match, and RAP/PSLF interaction.", "Whether a borrower in the grace period can enter RAP or IBR early without consolidating (consolidating after 2026-07-01 forfeits IBR/PAYE).", "Whether IBR months with a $0 required payment count toward RAP's 360 (statute counts IBR payments 'not less than the monthly payment required', including the minimum).", "Auto-pay 1% reduction: authorized generally by HEA 455(b)(9)(C), but its terms exist only in ED announcements. Secondary sources say it stops during forbearance; no primary source confirms this.", "Professional-degree definition: D.D.C. stay of 2026-06-24 is preliminary. Appeal status not confirmed. M.D./D.O. are unaffected.", "RAP servicer implementation quality since 2026-07-01 (billing accuracy, subsidy and match posting) was not verified; the web-search budget ran out before this could be checked.", "eCFR editorial notes say RISE amendments to 685.203(e)(4)-(7) and 685.220(h) could not be codified; the Federal Register text governs for those paragraphs.", "No rounding rule for RAP in statute or regulation; ED's table rounds to the cent.", "Loan-fee percentages for first disbursements on or after 2027-10-01 are not yet published." ] } }