Available Student Loan Repayment Plans Following the FY2025 Budget Reconciliation Law

/ Available Student Loan Repayment Plans Following the FY2025 Budget Reconciliation Law P.L. 119-21, the FY2025 budget reconciliation law, amends the Higher Education Act to change student loan repayment plan availability under the Direct Loan program. For borrowers of loans made before July 1, 2026, current plans remain available until July 1, 2028, on which date, borrowers in income-contingent repayment (ICR) plans will be transitioned to other available plans. For borrowers of new loans made on or after July 1, 2026, two newly enacted plan options will replace current plans. This infographic presents changes to repayment plan availability from enactment through July 1, 2028. For All Borrowers Date of Enactment July 4, 2025 Fixed repayment plans Standard 10-year repayment plan Extended repayment plan Graduated repayment plan Alternative repayment plans IDR plans IBR plans ICR plans* For Borrowers of Loans Made Before July 1, 2026 (assumes borrower does not take out new loans on or after July 1, 2026) New Plans Become Available Fixed repayment plans Standard 10-year repayment plan Extended repayment plan Graduated repayment plan Alternative repayment plans IDR plans IBR plans ICR plans RAP For Borrowers of New Loans on or After July 1, 2026 (also applies to borrower’s loans made before July 1, 2026) Fixed repayment plans Standard 10-year repayment plan Extended repayment plan Graduated repayment plan Tiered standard repayment plan Alternative repayment plans IDR plans IBR plans ICR plans RAP ICR Plans Repealed July 1 2028 Fixed repayment plans Standard 10-year repayment plan Extended repayment plan Graduated repayment plan Alternative repayment plans IDR plans IBR plans ICR plans RAP Fixed repayment plans Tiered standard repayment plan IDR plans RAP Newly enacted repayment plan in P.L. 119-21 Not available IBR - Income-based repayment ICR - Income-contingent repayment IDR - Income-driven repayment RAP - Repayment Assistance Plan *Consists of the income-contingent repayment, Pay As You Earn, and Saving on a Valuable Education plans Transition Out of ICR Before July 1, 2028, borrowers enrolled in an ICR plan must select another plan available to borrowers of loans made before July 1, 2026. If they do not make a selection by July 1, 2028, ED will enroll: all RAP-eligible loans RAP all non-RAP-eligible loans IBR Newly Enacted Plans in P.L. 119-21 Tiered standard repayment plan Fixed monthly payments so that borrower repays loan over a specified repayment term Repayment term based on outstanding principal balance (10 to 25 years) RAP Monthly payments equal to one-twelfth of 1% to 10% of total income Interest not covered by monthly payment is not charged to borrower Monthly principal reduction of upto $50 (“matching principal payment”) Maximum repayment periodof 30 years For additional information on changes to repayment plans made by P.L. 119-21, see CRS Report R48727, Amendments to the Higher Education Act Made by P.L. 119-21, the FY2025 Budget Reconciliation Law. Information as of March 12, 2026. Prepared by Rita Zota, Analyst in Education Policy, and Mari Lee, Visual Information Specialist.