New Federal Student Loan Updates – Important Changes Beginning July 1, 2026
Federal Student Loan Updates
At a Glance — What’s Changing
- New repayment plan options: Tiered Standard and Repayment Assistance Plan (RAP).
- New borrowing limits for graduate students and parents.
- Loan amounts may change if you enroll less than full-time.
- The federal definition of Professional Degree Programs is also changing, which may affect how certain advanced programs are treated for federal loan purposes.
- Some older repayment plans will end or close to new borrowers over the next few years.
Does This Apply to You?
These changes may affect you if:
- You already have federal student loans and will keep borrowing after July 1, 2026.
- You plan to start or continue a graduate or professional program in 2026–2027 or later.
- Your parent has, or plans to take, a Parent PLUS Loan.
- You expect to enroll less than full-time in any term starting in Fall 2026.
Key Information to Know
These changes are part of a broader federal update to simplify loan repayment options and provide new income-based repayment support.
| July 1, 2026 | New federal loan repayment plans begin. |
| July 1, 2026 | Some existing repayment plans stop accepting new borrowers. |
| 2026–2027 academic year | New borrowing limits and loan adjustments begin. |
| July 1, 2028 | Some older repayment plans will end. |
What you can do now
- Log in to Studentaid.gov to review your current loans and loan servicer.
- Make a list of any questions about repayment or borrowing for your next appointment with our Financial Aid Office.
Starting July 1, 2026, most borrowers with new loans will choose between two main repayment plans:
- Tiered Standard Repayment Plan
- Repayment Assistance Plan (RAP)
Borrowers with loans taken out before this date may still have access to additional repayment options.
*If you are already repaying loans, contact your loan servicer to see how these new plans compare to your current plan before you switch.*
This plan sets the repayment term based on the total loan balance when repayment begins.
| Loan Balance | Repayment Term |
| Less than $25,000 | 10 years |
| $25,000 – $49,999 | 15 years |
| $50,000 – $99,999 | 20 years |
| $100,000 or more | 25 years |
Monthly payments are calculated so the loan is fully repaid by the end of the repayment term.
This plan is similar to the traditional repayment plan, but the repayment period may
be longer, depending on how much you borrow
Example: If your total federal loan balance when you enter repayment is $30,000, your repayment term would be 15 years under the Tiered Standard Plan.
What this means for you
- Borrowing more can mean a longer repayment period and higher total interest paid over time.
- If you want to pay off your loans faster, you can usually pay more than the minimum each month.
The Repayment Assistance Plan (RAP) is designed to make student loan payments more manageable by tying payments to a borrower’s income.
Payments are calculated using the borrower’s Adjusted Gross Income (AGI) from their tax return.
Basic RAP Formula:
Monthly Payment = ((AGI × Percentage) ÷ 12) − ($50 × number of dependents) Minimum
monthly payment = $10
RAP Payment Percentage by Income
| Annual Income (AGI) | Payment Percentage |
| $0 – $10,000 | Minimum payment |
| $10,001 – $20,000 | 1% |
| $20,001 – $30,000 | 2% |
| $30,001 – $40,000 | 3% |
| $40,001 – $50,000 | 4% |
| $50,001 – $60,000 | 5% |
| $60,001 – $70,000 | 6% |
| $70,001 – $80,000 | 7% |
| $80,001 – $90,000 | 8% |
| $90,001 – $100,000 | 9% |
| Over $100,000 | 10% |
Important things to know:
- Payments cannot be $0 under RAP
- The minimum payment is $10 per month
- Each dependent listed on a borrower’s tax return reduces the monthly payment by $50
- Payments are recalculated based on income information
Simple RAP Example:
Example Borrower Adjusted Gross Income (AGI): $30,000 | Dependents: 1
According to the RAP table, income from $30,001–$40,000 uses 3%.
- Step 1: $30,000 × 3% = $900
- Step 2: $900 ÷ 12 = $75 per month
- Step 3: Subtract dependent allowance: $75 − ($50 × 1) = $25
In this example, the RAP payment would be $25 per month, as long as that is not below the $10 minimum.
Key Reminders:
- Payments cannot be $0 under RAP
- Minimum payment is $10 per month, even for very low incomes.
Need help with RAP?
If you think RAP might be right for you, contact your loan servicer or our Financial
Aid Office to review your options.
Income-Based Repayment (IBR) will continue to exist, but an important rule is changing.
| Previous Rule | New Rule (Beginning July 1, 2026) |
|
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This change may allow more borrowers to qualify for income-based repayment. Because borrowers no longer need to demonstrate Partial Financial Hardship to enter IBR, more borrowers may qualify for the plan.
What you can do:
- If you were previously told you did not qualify for IBR, you may want to re-check your eligibility after July 1, 2026.
Parent PLUS loans help parents pay for a dependent student’s education.
Under the new federal rules:
- Parent PLUS loans will generally use the Tiered Standard Repayment Plan
- Some parents may qualify for income-based repayment after consolidating their loans
To qualify for Income-Based Repayment, a parent borrower must:
- Consolidate the Parent PLUS loan into a Direct Consolidation Loan
- Enter an Income-Contingent Repayment plan
- Make at least one payment
- Apply to switch to Income-Based Repayment
For parents:
- Most Parent PLUS borrowers will use the Tiered Standard Plan unless they consolidate and move into an income-based option.
- Consolidation can open the door to income-based plans, but it may also change interest and forgiveness timelines, so parents should review carefully before consolidating.
Considering consolidation?
We encourage parents to contact their loan servicer or our office to discuss the pros
and cons of consolidation.
The federal government is introducing new limits on how much students and parents can borrow.
Graduate Student Loan Limits:
| Borrower Type | Annual Limit | Total Borrowing Limit |
| Graduate Students | 20,500 | $100,000 |
| Professional Students | $50,000 | $200,000 |
Parent PLUS Loan Limits:
| Limit Type | Amount |
| Annual borrowing | $20,000 |
| Total lifetime borrowing | $65,000 per dependent student |
These limits apply per student, even if multiple parents borrow loans.
Why this matters:
- Some students who previously relied on higher Grad PLUS borrowing may need to look at other ways to cover costs, such as payment plans, scholarships, or employer tuition assistance.
- Parents may not be able to borrow as much in Parent PLUS loans as before, especially over multiple years for the same student.
Approaching the new limits?
If your planned borrowing may exceed these new limits, talk with us early about your
options.
Professional Degree Programs (Federal Student Loan Definition)
Under federal student aid regulations, some graduate programs are classified as professional degree programs. These programs prepare students for licensed professions that require advanced training beyond a bachelor’s degree.
Professional degree programs may have different federal student loan limits compared to other graduate programs.
To be considered a professional degree program under federal student aid rules, the program generally must:
- Lead to entry into a licensed profession.
- Require advanced study beyond a bachelor’s degree.
- Usually require at least six years of postsecondary education.
- Prepare students for professional licensure or certification.
List of Professional Degree Programs Recognized for Federal Student Aid
The U.S. Department of Education recognizes the following programs as professional degree programs for federal student loan purposes:
| Profession | Degree Examples |
| Pharmacy | PharmD |
| Dentistry | DDS or DMD |
| Veterinary Medicine | DVM |
| Chiropractic | DC or DCM |
| Law | JD or LLB |
| Medicine | MD |
| Osteopathic Medicine | DO |
| Optometry | OD |
| Podiatry | DPM |
| Theology | M.Div. or MHL |
| Clinical Psychology | PsyD or PhD |
Beginning with the 2026–2027 academic year, federal loan amounts may be reduced if a student enrolls less than full-time.
Example enrollment levels:
| Enrollment Level | Example Credits |
| Full-time | 12 credits |
| Three-quarter time | 9 credits |
| Half-time | 6 credits |
Students must still be enrolled at least half-time to receive federal student loans.
If a student enrolls for fewer than full-time credits, the annual loan amount may be reduced proportionally based on the number of credits taken.
Example:
If your full-time annual loan offer is $4,000 and you attend half-time, your loan
might be reduced to around $2,000 for that year, depending on federal rules and your
eligibility.
What you should do:
- Before changing your enrollment level, contact the Financial Aid Office so you understand how your loan amount and refund may change.
Students who already have federal student loans before the new rules begin may qualify for grandfathering protections.
This means they may be able to continue using the current loan limits and repayment options.
To maintain these protections, students generally must:
- Remain in the same degree program
- Stay enrolled at the same institution
- Continue pursuing the same credential level
If a student changes programs or leaves school for an extended period, the grandfathered benefits may end.
Example:
If you started a master's degree program at our college in Fall 2025 and stay in that
same program and degree level, you may keep using the older loan limits and repayment
rules that applied when you began. If you switch programs, transfer to another school,
or take a long break, you may lose these protections and be subject to the new rules.
Some borrowers may need to consolidate their federal loans before July 1, 2026 in order to qualify for certain repayment options.
Borrowers considering consolidation should review their options carefully before this deadline.
Some borrowers may need to consolidate certain loans before July 1, 2026, to qualify for specific repayment plans or to keep certain benefits
Next steps:
- Log in to Studentaid.gov to review all your federal loans and see what types you have.
- Contact your loan servicer or our office well before the deadline if you are thinking about consolidating.
Students and parents can find additional information about federal student loan programs at:
Federal Student Aid (FSA): https://studentaid.gov
Your college Financial Aid Office can also help you understand your borrowing and repayment options.
You can also:
- Attend one of our upcoming loan changes info sessions (dates and details will be posted on our Financial Aid Events page).
- Schedule an appointment with our Financial Aid Office to talk about how these changes affect your personal borrowing and repayment plan.
Contact Information
Financial Aid Office
Phone: (201) 360-4200 / (201) 360-4214
Text: (201) 744-2767
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