rewrite this title Student Loans in 2026: What Borrowers Need to Know – NerdWallet

The student loan landscape will shift dramatically in 2026, and while many details are still being hammered out in rulemaking negotiations — or are being actively litigated in court — the broad outlines are becoming clearer for both current and future borrowers.

The One Big, Beautiful Bill Act (OBBBA) laid out changes that won’t go into effect until July 1, 2026, such as major changes to repayment plans for federal loans, or newly enacted limits on loans for graduate school. Still, gaining an understanding now is important, as the changes will have major implications for borrowers.

“So there’s sort of two buckets of changes,” says Betsy Mayotte, the president and founder of The Institute of Student Loan Advisors (TISLA), a nonprofit that provides free guidance to student loan borrowers. “There’s the bucket that’s going to affect people that are in school now, or that are contemplating attending college,” she says. “And then there’s the bucket that affects existing borrowers.”

Sarah Austin, policy analyst for the National Association of Student Financial Aid Administrators (NASFAA), says there’s a lot changing.

While the broad outlines are clear, Austin says, “we do still have a lot of unanswered questions in more of the logistical, implementation side of things. And that’s where we are right now, in the midst of several negotiated rulemaking sessions with the Department of Education to kind of iron out all of those details.”

Here’s what we know about the most notable coming changes.

Beginning on July 1, 2026, new borrowers will have two repayment options:

Under RAP, payments will be 1-10% of a borrower’s annual adjusted gross income, based on earning level, with $10 flat payments for those earning $10,000 per year or less. To attain forgiveness, the borrower will have to make regular payments for 30 years.

Existing borrowers will still have access to a modified version of the Income-Based Repayment Plan (IBR), which is a specific kind of IDR plan. However, other IDR plans will be phased out, even for existing borrowers.

New borrowers will have less flexibility when choosing a repayment plan, as the current menu of IDR options — each geared to different income scenarios — is reduced to a single one-size-fits-all plan.

Also, new Parent PLUS loans will not be eligible for RAP or any other form of income-driven repayment after July 1. More on that below.

If you have an existing federal loan, the options vary.

IBR will remain an option for current borrowers who do not take out any additional loans after July 1, 2026. If you’re already enrolled in IBR, no action is needed. If you want to switch to the legacy IBR plan, you have to do it by July 1, 2028.

If you are enrolled in SAVE: On Dec. 9, the Education Department (ED) announced the end to the SAVE payment plan as part of a proposed joint settlement agreement with the State of Missouri. As a result, no new borrowers will be enrolled in SAVE and any pending applications will be denied. The ED says borrowers will have a “limited time” to switch to another payment plan.

SAVE was created in 2023 under the Biden Administration and, up until Tuesday, was frozen by court action since mid-2024. All existing SAVE loans have been in forbearance — which means borrowers have not been obligated to make payments. However, the loans resumed accruing interest on Aug. 1.

The SAVE settlement is still pending court approval, but that’s likely a formality at this point. The timeline is unclear as to when current SAVE borrowers will need to switch to a new plan and resume payments.

As for existing Parent PLUS borrowers, there is once again a wrinkle.

Federal Parent PLUS loans are designed to help parents underwrite the cost of a college education for their dependent children. Until now, parents have been allowed to borrow up to the full cost of attendance for each child, and their loans have been eligible for the same array of IDR and forgiveness options as other undergraduate loans.

The program will change substantially on July 1, also thanks to the OBBB. Here’s how:

Parents who are helping to fund (or entirely funding) their children’s education could find that new limits change the affordability equation and put some schools out of reach. The absence of IDR options likewise could make the loans impractical or inadvisable for many families.

Parent PLUS loans lose all IDR eligibility on July 1, 2026 — and holders of existing loans could lose existing protections if they don’t take action.

If you hold a Parent PLUS loan today for someone who has completed schooling and want to keep your income-driven options open (and why wouldn’t you?), you need to consolidate your loans — and have the consolidation finalized before July 1, 2026.

Be aware that you have to get your application paperwork through an ED with a workforce that was gutted this year. Currently, Mayotte says, it takes about 60 days to process a consolidation, but that timeline could easily expand as the deadline approaches.

Her advice? “I’m telling people, especially Parent PLUS borrowers, to submit their consolidation application no later than February to be on the safe side,” Mayotte says.

The OBBBA eliminates the Grad PLUS loan as of July 1, 2026. It also places limits on Direct loans for graduate education for new graduate students.

For graduate programs (such as law or medicine), the new caps are:

For professional students, the caps will be:

A new lifetime limit of $257,500 for undergraduate and graduate loans will also be enacted next year.

The list of programs that will be designated as graduate vs. professional is still being finalized.

The new limits, coupled with the end of Grad PLUS, means that the total cost of some programs will exceed the amount that can be borrowed from federal sources after July 1. That means some students will have to consider private loans to cover the gap, or change their post-graduate plans.

For those still enrolled: Students enrolled in graduate or professional programs before July 1, 2026, can continue to borrow under the old rules — but only as long as they stay in the same program at the same university. The new loan limits do not apply.

For those who have finished school and are paying off their loans: Those currently enrolled in PAYE or ICR have until July 1, 2028, to switch to the legacy IBR (or will be automatically moved). Those enrolled in SAVE will also need to move off that plan, but the program is currently frozen by the courts.

Both Mayotte and Austin worry that the new rules will limit educational opportunities for some students. “Congress got rid of the Graduate Plus program, and significantly lowered the maximum amount that can be borrowed for both graduate programs and professional programs,” as well as new limits on Parent Plus loans, Mayotte says.

“What that’s going to mean is, some students are going to have to go to the private market to fill the gap,” Mayotte continues. “Private loans always make me bite my nails, because private loans often have few, if any, lower payment options if there’s a financial crisis.”

NerdWallet’s guidance is to exhaust all federal student loans and other financial aid you can get. If you still have funding gaps, consider private student loans.

More than ever, Mayotte advises students to truly budget out their school costs, including both federal and private loans, and decide if they can afford the monthly payments once they graduate.