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Understanding Your Student Loan Options in 2026
The Student Loan Landscape Has Changed Dramatically in 2026
If you enrolled in the SAVE plan, you received a notice: it's over. The Saving on a Valuable Education plan was struck down by the federal courts in 2024 and formally eliminated in a 2025 settlement. That means approximately 7.5 million borrowers needed to choose a new plan. This calculator helps you understand exactly what your options are right now, what you'll pay, and when — if ever — your balance will be gone.
Your Two Main Income-Driven Options in 2026
Income-Based Repayment (IBR) has survived every legal challenge and remains available. Under the newer version of IBR (for loans first disbursed on or after July 1, 2014), your payment is capped at 10% of your discretionary income — defined as income above 150% of the federal poverty line for your family size. After 20 years of qualifying payments, your remaining balance is forgiven (a taxable event under current law).
The brand-new Repayment Assistance Plan (RAP), available from July 1, 2026, uses a sliding scale: 1% to 10% of your total adjusted gross income, not just discretionary income. Dependents reduce your payment by $50 each. Unlike older plans, RAP guarantees no negative amortization — the government subsidizes any unpaid interest. The trade-off is a 30-year forgiveness window rather than 20.
Should You Refinance with a Private Lender?
Private student loan refinancing can make sense if you have a stable income, excellent credit, and no realistic path to income-driven forgiveness or PSLF. Rates from lenders like SoFi, Earnest, and Splash Financial start around 5%–6% for well-qualified borrowers. The critical caveat: once you refinance federal loans to private, you permanently lose access to IBR, RAP, PSLF, and any future federal forgiveness programs. This is an irreversible decision. Get a full comparison before you act.
How IBR Discretionary Income Is Calculated
IBR payments are based on your "discretionary income" — the difference between your adjusted gross income (AGI) and 150% of the federal poverty guideline for your family size. For a single borrower in 2026, the poverty guideline is $15,960, so 150% is $23,940. If your AGI is $55,000, your discretionary income is $31,060, and your new IBR payment is 10% of that divided by 12, or roughly $259/month. The old IBR formula uses 15% of discretionary income and applies to loans disbursed before July 1, 2014.
RAP: The New 2026 Federal Plan Explained
The Repayment Assistance Plan (RAP) launches July 1, 2026 under P.L. 119-21. Unlike IBR, RAP calculates your payment as a percentage of your total AGI — not just discretionary income — based on income brackets ranging from 1% (for incomes $10,001–$20,000) to 10% (for incomes over $100,000). The minimum payment is $10 per month. Each dependent reduces your payment by $50. Critically, if your RAP payment is less than the interest accruing on your loans, the federal government covers the gap — you will never see your balance grow under RAP. Forgiveness occurs after 360 qualifying payments (30 years).
PSLF: Still the Best Deal for Qualifying Borrowers
Public Service Loan Forgiveness remains the most powerful forgiveness program available. After 120 qualifying monthly payments — roughly 10 years — on an income-driven repayment plan while working full-time for a qualifying employer, your remaining balance is forgiven tax-free. Qualifying employers include federal, state, and local government agencies, and most 501(c)(3) nonprofits. As of July 2026, the employer eligibility rules have been updated — use the official PSLF Help Tool at StudentAid.gov to verify your employer before counting on this path.