US federal student loans in 2026
What changed on 1 July 2026 and what it means: the Repayment Assistance Plan, Tiered Standard, the end of Grad PLUS, the new borrowing caps, and forgiveness that is taxable again. Rates, limits and plan rules, each tied to the source.
One date decides which rules apply to you
One loan first disbursed on or after 1 July 2026 puts every one of your Direct Loans into the RAP and Tiered Standard world, including loans you took out years earlier. A new Direct Consolidation Loan counts as such a loan. Consolidating to reach IBR or ICR had to be done by 30 June 2026.
What SAVE borrowers need to know
A court order of 10 March 2026 bars the Department from implementing SAVE and invalidated most of the 2023 regulation it came from. Borrowers parked in SAVE forbearance have to choose another plan or their servicer will choose one for them. The plan is eliminated by statute on 1 July 2028 in any case.
Repayment plans
| Plan | Status | Counts for PSLF | Forgiveness |
|---|---|---|---|
| Repayment Assistance Plan | Open | Yes | 30 years |
| Tiered Standard | Open | No | None |
| Income-Based Repayment | Closed to new loans | Yes | 20 years |
| Pay As You Earn | Ends 2028-07-01 | Yes | 20 years |
| Income-Contingent Repayment | Ends 2028-07-01 | Yes | 25 years |
| Standard | Closed to new loans | Yes | None |
| Graduated | Closed to new loans | No | None |
| Extended | Closed to new loans | No | None |
Forgiveness and discharge
Tax-free
Public Service Loan Forgiveness
The whole remaining balance discharged after 120 qualifying monthly payments while working full time for a government or a qualifying non-profit. Tax-free, and the only forgiveness that still is.
Tax-free
Teacher Loan Forgiveness
Up to $17,500 for a highly qualified secondary mathematics or science teacher or a special education teacher, or up to $5,000 for other qualifying teachers, after five complete and consecutive years at a low-income school.
Tax-free
Total and Permanent Disability discharge
The whole balance discharged, along with any TEACH Grant service obligation, on evidence of total and permanent disability.
Tax-free
Closed School discharge
The whole balance discharged, payments refunded, and the loan removed from your credit report, where your school closed while you were enrolled or shortly after you left.
Tax-free
Borrower Defense to Repayment
Discharge where your school misled you. Which rules apply depends entirely on when your loans were first disbursed, and the newest and most generous set has been pushed back to 2035.
Taxable from 2026
Income-driven forgiveness
The balance left at the end of an income-driven plan's horizon: twenty years on IBR or PAYE, twenty-five on old IBR or ICR, thirty on RAP.
Rates for 2026-27
| Loan | Borrower | Rate | Statutory cap |
|---|---|---|---|
| Direct Subsidized and Unsubsidized | Undergraduate | 6.52% | 8.25% |
| Direct Unsubsidized | Graduate and professional | 8.07% | 9.50% |
| Direct PLUS | Parents, and graduate and professional students | 9.07% | 10.50% |
Origination fees are 1.057% on a Direct Subsidized or Unsubsidized loan and 4.228% on a PLUS loan, deducted at disbursement. Both are published only to 2027-09-30; what replaces them has not been set.
How much you can borrow
| Borrower | Limit |
|---|---|
| Dependent undergraduate | First year $5,500, of which $3,500 subsidized. Second year $6,500, of which $4,500 subsidized. Third and beyond year $7,500, of which $5,500 subsidized |
| Independent undergraduate | First year $9,500, of which $3,500 subsidized. Second year $10,500, of which $4,500 subsidized. Third and beyond year $12,500, of which $5,500 subsidized A dependent student whose parent is denied a PLUS loan for adverse credit borrows at these limits. |
| Graduate | $20,500 Unsubsidized only. Grad PLUS is no longer available, so this is the ceiling. |
| Professional | $50,000 Raised from $20,500. Which programmes count as professional is under a court stay. |
| Parent PLUS | $20,000 Per dependent student, all parents combined. Previously this was the cost of attendance less other aid, with no fixed cap. |
| Borrower | Limit | What it means |
|---|---|---|
| Dependent undergraduate | $31,000.00 | No more than $23,000 of it subsidized. Unchanged. |
| Independent undergraduate | $57,500.00 | No more than $23,000 of it subsidized. Unchanged. |
| Graduate | $100,000.00 | Excluding undergraduate borrowing, which used to count towards the old $138,500 figure. |
| Professional | $200,000.00 | Less anything borrowed as a graduate student, and excluding undergraduate borrowing. |
| Parent PLUS | $65,000.00 | Per dependent student, all parents combined. Amounts already repaid, forgiven or discharged do not free the room up again. |
| Lifetime maximum for a student borrower | $257,500.00 | Across every Direct and FFEL subsidized, unsubsidized and graduate PLUS loan. Repaying or having a balance discharged does not restore room. Parent PLUS sits outside it. |
This one is being litigated
Which programmes count as professional, which sets the $50,000 annual and $200,000 aggregate borrowing limits.
U.S. District Court for the District of Columbia, preliminary stay of 24 to 25 June 2026.
Some programmes previously treated as professional are not, and the reverse, for as long as the stay holds. Ask your institution rather than relying on a list. Three suits are pending and a ruling on the merits can come after 4 December 2026.
By state
State pages carry the one thing that is genuinely hard to find and now matters again: whether your state will tax a forgiven balance. In the nine states with no income tax on wages the answer is a clean no. Everywhere else it is complicated enough that this site points you at your revenue department rather than guessing.
Sources
- Repayment plans and important definitions, U.S. Department of Education. Checked on . Backs which plans are open to which borrowers from 1 July 2026; the Tiered Standard term brackets and its $50 minimum; the effect of a single post-cutover disbursement on all of a borrower's loans.
- Income-driven repayment plans, U.S. Department of Education. Checked on . Backs the IBR, PAYE and ICR formulas and forgiveness horizons.
- Court actions affecting income-driven repayment, U.S. Department of Education. Checked on . Backs the status of SAVE after the 10 March 2026 order; the 1% automatic debit reduction; that income-driven payment counters are not currently displaying.
- Reimagining and Improving Student Education (RISE): Federal Student Loan Program, final regulations, Office of the Federal Register. Checked on . Backs the regulation implementing the plan changes, effective 1 July 2026.
- Interest Rates for Federal Direct Loans First Disbursed Between July 1, 2026 and June 30, 2027 (GENERAL-26-33), U.S. Department of Education, Federal Student Aid. Checked on . Backs the 6.52%, 8.07% and 9.07% rates for 2026-27; the statutory add-ons and caps; the 12 May 2026 Treasury auction high yield of 4.468%.
- Interest rates and fees for federal student loans, U.S. Department of Education. Checked on . Backs the 1.057% and 4.228% origination fees; that the published fees run only to 30 September 2027; the 5% rate on outstanding Perkins loans.
- Repayment plans and important definitions, U.S. Department of Education. Checked on . Backs the annual and aggregate borrowing limits from 1 July 2026; the $20,000 annual and $65,000 aggregate Parent PLUS caps; the $257,500 lifetime maximum for a student borrower; proration of annual limits for part-time enrolment; the 1% automatic debit reduction and its June 2028 expiry.
- Public Service Loan Forgiveness, U.S. Department of Education. Checked on . Backs the 120 qualifying payments and which plans qualify; that Tiered Standard payments do not qualify; the qualifying and non-qualifying employer categories; that the vacated employer rule has no effect.
- Teacher Loan Forgiveness, U.S. Department of Education. Checked on . Backs the $17,500 and $5,000 amounts and who each applies to; the five complete and consecutive years requirement; that the same service cannot count towards PSLF.
- Total and Permanent Disability discharge, U.S. Department of Education. Checked on . Backs the three qualification routes; the automatic discharge through quarterly data matches; the three-year monitoring period and that a VA-based discharge has none.
- Closed School discharge, U.S. Department of Education. Checked on . Backs the 180-day window and the automatic discharge one year after closure; the refund of payments and deletion of adverse credit history.
- Court actions affecting income-driven repayment, U.S. Department of Education. Checked on . Backs that the tax exclusion covered discharges from 1 January 2021 to 31 December 2025; that a milestone reached before 2026 remains covered if the discharge is processed later.