Last verified Oct 17, 2026
The rules, and where each one comes from
This is the list our calculator and guides are built on. If a rule here changes, the pages that use it change too, and the date moves.
Who can pick which plan
| Any Direct Loan first paid out on or after July 1, 2026 limits all of the borrower’s Direct Loans to RAP or Tiered Standard; Tiered Standard is the default. | Law, HEA 455(d)(7) StudentAid.gov |
| Borrowers with only older loans can use RAP, IBR, Standard, Graduated, Extended; PAYE and ICR until June 30, 2028. | 34 CFR 685.209(c) StudentAid.gov |
| Parent PLUS loans and consolidation loans that repaid them are not eligible for RAP. | 34 CFR 685.209(d)(4) StudentAid.gov |
| ICR and PAYE borrowers who don’t pick a plan by July 1, 2028 go to RAP (or IBR for loans RAP can’t take). | Law, Sec. 82001(a) 34 CFR 685.209(c)(7) |
RAP payment and benefits
| Monthly payment = base payment ÷ 12 − $50 per dependent claimed on the tax return; never under $10. | Law, HEA 455(q)(4)(B) 34 CFR 685.209(f)(5), (g)(3) |
| Base payment: $120 if AGI is $10,000 or less; 1% of AGI above $10,000 up to $20,000, rising one point per $10,000, to 10% above $100,000. | 34 CFR 685.209(b)(2) StudentAid.gov table |
| On-time payments that don’t cover the month’s interest: the unpaid interest is not charged. | Law, HEA 455(q)(2)(A) 34 CFR 685.209(h)(4) |
| If principal falls by less than $50, the Department reduces it by the lesser of $50 or the amount paid, minus the principal already paid. | Law, HEA 455(q)(2)(B) 34 CFR 685.209(o)(2) |
| Forgiveness after 360 qualifying payments over at least 30 years; may be taxable except under PSLF. | 34 CFR 685.209(k)(7)–(8) StudentAid.gov |
| Joint filers: combined AGI; if the spouse has eligible loans, the payment is prorated by each person’s share of the couple’s debt. | 34 CFR 685.209(e), (g)(3) |
IBR
| 10% (new borrower) or 15% of AGI above 150% of the poverty guideline, divided by 12; capped at the 10-year standard payment; under $5 becomes $0, $5 to $10 becomes $10. | 34 CFR 685.209(b), (f), (g)(1) |
| Forgiveness after 20 years (new borrower) or 25 years. | 34 CFR 685.209(k)(1)–(2) |
| No partial financial hardship needed to enter. | Law, Sec. 82001(f) |
| Only loans made before July 1, 2026. | 34 CFR 685.209(d)(5) |
Standard plans
| Older loans: 10-year Standard, at least $50 a month. | 34 CFR 685.208(b)(1) |
| Tiered Standard: under $25,000 is 10 years; $25,000 to under $50,000 is 15; $50,000 to under $100,000 is 20; $100,000 or more is 25. | Law, HEA 455(d)(7)(A) 34 CFR 685.208(c)(1) |
PSLF
| On-time RAP payments qualify. | Law, Sec. 82004 34 CFR 685.219(b)(28) |
| Tiered Standard payments do not qualify, according to StudentAid.gov. | StudentAid.gov |
Student loan interest deduction
| Deduct the interest you paid on a qualified student loan, up to $2,500, as an adjustment to income. | 26 U.S.C. 221(a), (b)(1) IRS Topic 456 |
| 2026: phases out from $85,000 to $100,000 of MAGI ($175,000 to $205,000 on a joint return). 2025: $85,000–$100,000 ($170,000–$200,000). | IRS Rev. Proc. 2025-32 §4.29 IRS Pub. 970 |
| Phase-out = deduction × (MAGI − start) ÷ $15,000 ($30,000 joint), ratio rounded to 3 places, max 1.000. | 26 U.S.C. 221(b)(2) Pub. 970 Worksheet 4-1 |
| Not allowed if married filing separately, or if someone can claim you as a dependent. | 26 U.S.C. 221(c), (e)(2) IRS Topic 456 |
| Interest paid by an employer under an educational assistance program can’t also be deducted; up to $5,250 a year of such payments is tax-free, permanently for payments after 2025. | IRS Pub. 970 Law, Sec. 70412 |
Prepayment, PSLF details, Teacher Loan Forgiveness
| Federal loans can be prepaid at any time without penalty; a prepayment of at least one monthly payment advances the next due date unless you ask otherwise. | 34 CFR 685.211(a) |
| PSLF full time = an average of at least 30 hours a week; qualifying employers include government at any level and 501(c)(3) nonprofits; buyback covers non-qualifying deferment or forbearance months while employed full time, except RAP periods. | 34 CFR 685.219 |
| Teacher Loan Forgiveness: up to $5,000 ($17,500 for qualifying math, science and special education teachers) after five consecutive years at a designated low-income school. | 34 CFR 685.217 |
Parent PLUS and ICR
| A consolidation loan made on or after July 1, 2026 can only be repaid on Tiered Standard or RAP, and one that repaid parent PLUS can’t use RAP. | Law, HEA 455(g)(3), (d)(7)(E) |
| ICR payment = lesser of the 12-year payment × the 2026 income percentage factor, and 20% of AGI above the poverty line ÷ 12. ICR closes July 1, 2028. | 91 FR 34815 (June 9, 2026) 34 CFR 685.209(f)(4) |
Default and collections
| Default after 270 days without payment; involuntary collection can start after more than 360 days. | 34 CFR 685.102 StudentAid.gov FAQ |
| Wage garnishment: up to 15% of disposable pay, never cutting it below 30 × the $7.25 federal minimum wage per week. | 20 U.S.C. 1095a 34 CFR 34.19 |
| Social Security offset: the lesser of 15% and the amount above $750 a month. | 31 CFR 285.4 |
| On Jan. 16, 2026 the Department announced a delay of garnishment and Treasury offset; no official restart date found as of the verification date. | ED press release |
| Rehabilitation: 9 payments within 20 days of due dates over 10 months; minimum $5 ($10 from July 1, 2027); twice allowed from July 1, 2027. | 34 CFR 685.211(f) Law, Sec. 82003 |
Consolidation
| Rate = weighted average of the loans consolidated, rounded up to the next 1/8 of a percent; fixed; no cap since July 1, 2013. | 34 CFR 685.202(a)(10) |
| A consolidation loan made on or after July 1, 2026 can only use RAP or Tiered Standard; with parent PLUS, Tiered Standard only. | Law, HEA 455(g)(3) StudentAid.gov |
| Defaulted loans: three on-time payments first, or agree to an income-driven plan; collection costs up to 18.5%. | 34 CFR 685.220, 685.102 |
Refinancing
| Private loans can’t be consolidated into a Direct Consolidation Loan; income-driven plans, PSLF and federal postponement options are federal-loan features. | StudentAid.gov |
SAVE transition
| SAVE ended by court order in March 2026; servicers began 90-day notices on July 1, 2026; a final 30-day notice follows; then a fixed plan. | StudentAid.gov FAQ |
2026 poverty guidelines used for IBR
| Area | 1 person | Each additional |
|---|---|---|
| 48 states and DC | $15,960 | $5,680 |
| Alaska | $19,950 | $7,100 |
| Hawaii | $18,360 | $6,530 |
Source: HHS/ASPE 2026 poverty guidelines.
Still open
- How RAP interacts with PSLF in detail: StudentAid.gov says more information is coming.
- How the RAP interest waiver and principal match work when you pay more than the bill: StudentAid.gov says more information is coming.
- The last possible SAVE deadline: every notice is individual and all notices go out by the end of 2026; no single final date has been published.