Starting July 1, 2026, student loan borrowers who take out a new federal loan will be limited to just two repayment choices — the Repayment Assistance Plan (RAP) or a new Tiered Standard Plan — under rules the Education Department put in place.
The change is part of a broader overhaul from the One Big Beautiful Bill Act that “streamlines the student loan system,” the department said, and it means borrowers who take any new Direct Loan after July 1 will have to repay all their Direct Loans under one of the two new plans, CBS News reported.
The overhaul also tightens how much students and parents can borrow. CBS News says Parent PLUS loans will be capped at $20,000 per year and $65,000 total per student, graduate borrowing will face annual and lifetime limits, and a lifetime cap of $257,500 will apply to most new federal student loans.
Existing borrowers who do not take out new loans can generally keep their current repayment plans for now and may be able to enroll in RAP, according to the Student Loan Borrower Assistance project. But borrowers who consolidate or borrow again after July 1 will move onto the two-track system and lose access to older plans.
The SAVE repayment plan is being phased out; servicers are expected to notify SAVE enrollees they must pick a new plan and will place borrowers on the standard option if they do nothing within the required window, Student Loan Borrower Assistance explains.
Borrowers should check communications from their loan servicer and confirm contact details at studentaid.gov. Those weighing new borrowing or consolidation should compare monthly payments under RAP and the Tiered Standard Plan before proceeding, experts told CBS News.
For background on how repayment choices narrowed and what it means for students and families, see our earlier coverage of how repayment options were cut and what new borrowers face starting July 1, 2026 and related reporting on the policy changes.
Further reading on related site coverage: Student loans: federal repayment options narrowed for new loans starting July 1, 2026 and Trump student loan repayment rules cut choices for new borrowers.
Sources
- CBS News — coverage of the July 1, 2026 rule changes, borrowing caps, and how repayment options are being narrowed.
- Student Loan Borrower Assistance — detailed explainer on who is affected, RAP and Tiered Standard Plan mechanics, and SAVE transition guidance.
