Available Student Loan Repayment Plans Following the FY2025 Budget Reconciliation Law

Available Student Loan Repayment Plans Following the FY2025 Budget Reconciliation Law

Available Student Loan Repayment Plans Following the FY2025 Budget Reconciliation Law

March 12, 2026 (IG10093)

Summary

Available Student Loan Repayment Plans Following the FY2025 Budget Reconciliation Law

P.L. 119-21, the FY2025 budget reconciliation law, amends the Higher Education Act to change student loan repayment plan availability under the Direct Loan program. For borrowers of loans made before July 1, 2026, current plans remain available until July 1, 2028, on which date, borrowers in income-contingent repayment (ICR) plans will be transitioned to other available plans. For borrowers of new loans made on or after July 1, 2026, two newly enacted plan options will replace current plans. This infographic presents changes to repayment plan availability from enactment through July 1, 2028.

For All Borrowers

Date of Enactment July 4, 2025

Fixed repayment plans

Standard 10-year repayment plan

Extended repayment plan

Graduated repayment plan

Alternative repayment plans

IDR plans

IBR plans

ICR plans*

For Borrowers of Loans Made Before July 1, 2026 (assumes borrower does not take out new loans on or after July 1, 2026)

New Plans Become Available

Fixed repayment plans

Standard 10-year repayment plan

Extended repayment plan

Graduated repayment plan

Alternative repayment plans

IDR plans

IBR plans

ICR plans

RAP

For Borrowers of New Loans on or After July 1, 2026 (also applies to borrower's loans made before July 1, 2026)

Fixed repayment plans

Standard 10-year repayment plan

Extended repayment plan

Graduated repayment plan

Tiered standard repayment plan

Alternative repayment plans

IDR plans

IBR plans

ICR plans

RAP

ICR Plans Repealed July 1 2028

Fixed repayment plans

Standard 10-year repayment plan

Extended repayment plan

Graduated repayment plan

Alternative repayment plans

IDR plans

IBR plans

ICR plans

RAP

Fixed repayment plans

Tiered standard repayment plan

IDR plans

RAP

Newly enacted repayment

plan in P.L. 119-21

Not available

IBR - Income-based repayment

ICR - Income-contingent repayment

IDR - Income-driven repayment

RAP - Repayment Assistance Plan

*Consists of the income-contingent repayment, Pay As You Earn, and Saving on a Valuable Education plans

Transition Out of ICR

Before July 1, 2028, borrowers enrolled in an ICR plan must select another plan available to borrowers of loans made before July 1, 2026.

If they do not make a selection by July 1, 2028, ED will enroll:

all RAP-eligible loans  RAP

all non-RAP-eligible loans  IBR

Newly Enacted Plans in P.L. 119-21

Tiered standard repayment plan

Fixed monthly payments so that borrower repays loan over a specified repayment term

Repayment term based on outstanding principal balance (10 to 25 years)

RAP

Monthly payments equal to one-twelfth of 1% to 10% of total income

Interest not covered by monthly payment is not charged to borrower

Monthly principal reduction of upto $50 ("matching principal payment")

Maximum repayment periodof 30 years

For additional information on changes to repayment plans made by P.L. 119-21, see CRS Report R48727, Amendments to the Higher Education Act Made by P.L. 119-21, the FY2025 Budget Reconciliation Law.

Information as of March 12, 2026. Prepared by Rita Zota, Analyst in Education Policy, and Mari Lee, Visual Information Specialist.