Spring Grads Face New Loan Rules in 2026

For most students, graduation means caps, gowns, and a six-month countdown until the first loan payment is due. But for the Class of 2026, that countdown leads to a repayment system that works differently than it did for any class before them.

The changes are real, they affect you specifically, and understanding them now — during your grace period — gives you more options than waiting until a bill arrives in November.

What Changed and Why

The One Big Beautiful Bill Act, signed into law on July 4, 2025, restructured federal student loan repayment. The changes phase in across the next 18 months, with the most significant taking effect July 1, 2026.

The biggest single change for this year's graduates: SAVE is gone.

The Saving on a Valuable Education plan, which capped payments at 5% of discretionary income for undergraduate borrowers and offered forgiveness after 10–25 years depending on loan balance, was struck down as unlawful. The U.S. Department of Education issued guidance to all 7.5 million SAVE borrowers in spring 2026, directing them to exit the plan and enroll in a legal repayment option.¹

If you borrowed for undergraduate education in the last few years expecting SAVE to be available after graduation, that plan is no longer available.

Your Two Options Starting July 1, 2026

For borrowers taking out new loans after July 1, 2026, or for graduating seniors who have not yet chosen a repayment plan, the federal system will offer two options:²

Standard Repayment Plan: Fixed monthly payments spread across 10 years. If you borrowed $30,000, expect payments around $300/month depending on your interest rate. No income-based adjustment — the payment does not change if your income changes.

Repayment Assistance Plan (RAP): Monthly payments ranging from 1% to 10% of your gross earnings, with a minimum payment floor of $10 per month. The percentage rises with your income — the more you earn, the larger the required payment. Forgiveness on any remaining balance occurs after 30 years.

The key difference between RAP and the older income-driven plans many previous graduates used: the forgiveness timeline is 30 years, not the 20 or 25 years available under PAYE, REPAYE, or IBR for older borrowers. For a 22-year-old, 30 years means age 52 before any forgiveness kicks in.

7.5M — borrowers who were enrolled in the SAVE plan and directed by the Department of Education to exit and choose a new repayment option. SAVE is no longer available as an option.

What This Means for Your Monthly Payment

The gap between what Class of 2026 graduates will pay versus what older borrowers pay on legacy income-driven plans depends heavily on income.

For low-income graduates starting in entry-level positions, RAP's 1% floor may produce a lower payment than the Standard Plan. For graduates earning $55,000 or more immediately out of school, RAP could produce a higher monthly payment than SAVE would have.

CNBC reported on April 19 that "many borrowers will see higher monthly payments under the new RAP compared to the former SAVE plan, especially middle-income households."³

If you have graduate school loans on top of undergraduate debt, the picture is more complicated. Grad PLUS loans are being eliminated for new borrowers on July 1, 2026, and existing Grad PLUS balances count toward the new $257,500 lifetime borrowing limit. If you borrowed Grad PLUS loans for a program that started before July 2026, check with your loan servicer about how those interact with your repayment options. Our guide to income-driven repayment plans covers the legacy options that may still apply to older graduate loans.

What to Do During Your Grace Period

You have approximately six months between graduation and your first payment. Use them.

Step 1: Find your servicer. Log into studentaid.gov with your FSA ID to see who is managing your loans. Loan servicers changed for many borrowers during the SAVE transition — confirm yours is current and has your correct contact information.

Step 2: Calculate your options. Run your numbers through studentaid.gov's loan simulator before July 1. The simulator will show you what your monthly payment would look like under Standard Repayment and RAP given your expected income. This is not a commitment — it is information.

Step 3: Know your actual debt. The average student loan debt for 2026 graduates is roughly $29,000–$30,000 for bachelor's degree holders, though it varies significantly by school and field. Knowing your exact balance and interest rates — not a rough estimate — is the starting point for any repayment decision.

Step 4: Watch what your servicer sends you. During the grace period, your servicer should contact you with repayment plan options and an enrollment deadline. Do not ignore those communications. Missing the deadline can land you on the Standard Plan by default, which may or may not be your best option.

If you start a job with a qualifying employer — government, nonprofit, or public service organization — your loans may be eligible for Public Service Loan Forgiveness (PSLF) after 10 years of qualifying payments. PSLF still exists and still works, but you must enroll in a qualifying repayment plan. RAP qualifies for PSLF. Standard Repayment qualifies for PSLF. Confirm your employer qualifies using the PSLF Help Tool on studentaid.gov before choosing a plan.

The Broader Repayment Landscape You Are Entering

Previous graduating classes had more flexibility: PAYE, REPAYE, IBR, and SAVE all existed as income-driven options with different payment caps and forgiveness timelines. As of July 1, 2026, that menu is largely gone for new borrowers.

The Street reported in April 2026 that the Class of 2026 is "walking into a harsher student loan system" — not because payments are necessarily unmanageable, but because the safety nets that protected lower-income borrowers in previous years have been narrowed.²

Understanding the full range of student loan repayment plans — including legacy options that may still apply if you have older loans — is worth an hour of reading before your grace period ends.

If you borrowed for graduate school, also read our guide to paying for graduate school and understand how the OBBBA changes affect existing grad borrowers differently than undergraduates.

The average monthly student loan payment for a borrower with $30,000 in debt on a 10-year Standard Plan runs roughly $300–$340/month. On RAP, it depends entirely on your income. Neither number is hypothetical — both are real commitments that start in November.

Know the number before it arrives.

Footnotes

1. U.S. Department of Education. (2026). U.S. Department of Education Announces Next Steps for Borrowers Enrolled in the Unlawful SAVE Plan. https://www.ed.gov/about/news/press-release/us-department-of-education-announces-next-steps-borrowers-enrolled-unlawful-save-plan ↩

2. The Street. (2026, April). Class of 2026 grads walk into a harsher student loan system. https://www.thestreet.com/personal-finance/class-of-2026-grads-walk-into-a-harsher-student-loan-system ↩ ↩²

3. Frank, J. (2026, April 19). This year's college graduates face a changed student loan landscape. CNBC. https://www.cnbc.com/2026/04/19/college-graduates-face-federal-student-loan-changes.html ↩