As your trusted student loan advisor, Kaplan Law Firm is here to guide you through upcoming shifts in student loan law. Changes taking effect for new borrowers on July 1, 2026, and for existing borrowers by 2028 will impact your federal student debt, repayment plans, and options for federal education loan forgiveness. Below, we break down what you need to know, and how a tailored student loan consultation can help you choose the best path forward.
Two Simplified Plans for New Borrowers
Beginning July 1, 2026, federal student loan law will streamline repayment into two core options. As your student loan advisor and lawyer for student loans, we recommend understanding each plan’s mechanics, pros and cons, and how they align with your long‑term goals.
1. Revised Standard Repayment Plan
- Term Length by Balance
- Borrowings up to $20,000: 15‑year amortization
- Borrowings $20,001–$50,000: 20‑year amortization
- Borrowings above $50,000: 25‑year amortization
- Borrowings up to $20,000: 15‑year amortization
- Monthly Payment Calculation
- Based on a fixed interest rate (your original loan rate) spread over the term above
- Payments remain level and predictable throughout the repayment period
- Based on a fixed interest rate (your original loan rate) spread over the term above
- Interest Cost
- Because the term is longer than the current 10‑year standard, total interest paid will increase in most cases
- There is no cap on interest growth—early principal reduction (via extra payments) is your best tool to save
- Because the term is longer than the current 10‑year standard, total interest paid will increase in most cases
- Eligibility & Enrollment
- Automatic for all new borrowers unless you affirmatively choose RAP
- No income documentation required beyond the initial loan application
- Automatic for all new borrowers unless you affirmatively choose RAP
- Ideal For
- Borrowers with stable incomes who prefer certainty in monthly budgeting
- Those who plan to accelerate repayment through extra principal payments to reduce total interest
- Borrowers with stable incomes who prefer certainty in monthly budgeting
2. Repayment Assistance Plan (RAP)
- Payment Formula
- 10 percent of your household adjusted gross income (AGI) divided by 12, minus a poverty‑line threshold
- Annual $550 income credit per dependent child reduces your AGI for payment purposes
- 10 percent of your household adjusted gross income (AGI) divided by 12, minus a poverty‑line threshold
- $10 Minimum Payment
- Ensures every borrower contributes, even if income falls below the poverty‑line adjustment
- Prevents accrual of unpaid balance, safeguarding future forgiveness eligibility
- Ensures every borrower contributes, even if income falls below the poverty‑line adjustment
- Forgiveness Timeline
- Remaining balance forgiven after 20 years for undergraduate loans, 25 years for graduate or Parent PLUS loans
- Forgiveness is tax‑free under current law
- Remaining balance forgiven after 20 years for undergraduate loans, 25 years for graduate or Parent PLUS loans
- Recertification
- Income and family size must be documented annually via StudentAid.gov
- Failure to recertify can trigger default, so set reminders ahead of deadlines
- Income and family size must be documented annually via StudentAid.gov
- Pros & Cons
- Pros: Lower payments when income is modest; forgiveness timeline remains intact; dependent credits can reduce payments further
- Cons: Families with multiple dependents may see higher payments than under legacy plans; variable payments can complicate budgeting; recertification adds paperwork
- Pros: Lower payments when income is modest; forgiveness timeline remains intact; dependent credits can reduce payments further
- Ideal For
- Borrowers with fluctuating or lower incomes who value caps on payments tied to earnings
- Parents and graduate students seeking the path to federal education loan forgiveness without high monthly outlays
- Borrowers with fluctuating or lower incomes who value caps on payments tied to earnings
Side‑by‑Side Comparison
| Feature | Revised Standard Plan | Repayment Assistance Plan (RAP) |
| Term | 15–25 years based on balance | 20–25 years (undergrad/grad) |
| Monthly Payment Basis | Fixed amortization of principal + interest | Percentage of AGI minus poverty adjustment |
| Minimum Payment | N/A (calculated to amortize over term) | $10 |
| Interest Paid Over Life | Higher than a 10‑year plan; depends on term | Varies with income; may capitalize unpaid interest if payment < interest accrued |
| Forgiveness | Remaining balance after term is zero (none) | After 20–25 years, tax‑free |
| Income Documentation | Only at loan origination | Annual recertification required |
| Ideal Borrower Profile | Stable income; plans to pay extra principal | Lower/fluctuating income; seeks forgiveness |
What Existing Borrowers Should Expect
For those repaying loans borrowed before July 1, 2026:
- Interest accrual resumes August 1, 2025. The pandemic pause has ended, and interest is back on all plans.
- Legacy plans phased out by 2028. IBR, PAYE, SAVE, ICR and others will require transition into one of the two new plans.
- Full collections restored. Wage garnishments (up to 15 percent of disposable income), tax‑refund offsets, and Social Security offsets are in effect again.
If you’re in a legacy program, schedule a student loan consultation with our team. We’ll analyze your current plan versus the revised standard plan and RAP, ensuring you select the option that minimizes your federal student debt over time.
New Borrowing Caps & Fewer Deferments
The updated law also imposes stricter borrowing limits and curtails deferment options:
- Grad PLUS capped at $20,500 per year; Parent PLUS capped at $65,000 per child.
- Hardship deferments end July 2027. Unemployment and economic deferments will no longer be available.
Whether you’re a graduate student or a parent co‑signing, understanding these limits is essential. During your student loan consultation, we’ll map out borrowing strategies and explore alternative funding to minimize reliance on federal loans.
Maximizing Federal Education Loan Forgiveness
Despite the changes, opportunities for federal education loan forgiveness remain under the two new plans:
- Revised Standard Plan: Forgiveness may occur after 15–25 years depending on your loan balance and repayment term.
- RAP: Income‑driven forgiveness continues after 20–25 years, with AGI‑based payments potentially reducing your overall cost.
Our experience in student loan law means we can help you document qualifying payments, certify employment, and track progress toward forgiveness. A targeted strategy today can preserve your eligibility for tomorrow’s relief.
Next Steps: Your Personalized Strategy
- Gather income documentation. RAP relies on AGI, so recent pay stubs and tax returns are essential.
- Assess family size credits. Dependent allowances can affect your monthly obligation.
- Plan ahead of deadlines. Legacy plan transitions begin in 2026 and must complete by 2028.
Kaplan Law Firm is ready to support you as your lawyer for student loans and student loan advisor. Schedule a student loan consultation to:
- Clarify how these changes affect your federal student debt
- Determine which repayment plan aligns with your financial goals
- Develop a roadmap to federal education loan forgiveness
Contact Us for a Consultation
Phone: (312) 555‑1212
Email: info@kaplanlawfirm.com
Online: https://www.financialrelief.com/contact/
Choosing the right path under evolving student loan law can make all the difference in your financial peace of mind. Let us help you navigate the changes with confidence and clarity—without exclamation points, but with unwavering support.
