Income-driven repayment in 2026: which plans survive

The menu of income-driven repayment plans got much shorter in 2026. If you are trying to figure out which plan you can be on, and which ones are disappearing, the rules now hinge on when you borrowed and whether you take any new loans. Here is what survives and the trap that catches people who go back to school.

What income-driven repayment means

Income-driven repayment (IDR) is the umbrella term for federal plans that size your monthly payment to your income rather than a fixed amount. IBR, PAYE, ICR, and the new RAP are all IDR plans. The appeal is the same across all of them: when your income is low, your payment is low, and after a set number of years, any remaining balance is forgiven.

What survives, what ends, and when

IBR (Income-Based Repayment) is the one legacy income-driven plan that survives for existing borrowers, and it still leads to forgiveness after 25 years. PAYE (Pay As You Earn) and ICR (Income-Contingent Repayment) are being phased out by July 1, 2028. Graduated and extended fixed plans are being wound down too. Anyone taking out a new loan after July 1, 2026 gets a much shorter menu: only RAP or a reworked tiered standard plan.

Plan	Status	Available to
IBR	Survives; forgiveness after 25 years	Existing borrowers
PAYE	Phasing out by July 1, 2028	Existing enrollees, time-limited
ICR	Phasing out by July 1, 2028	Existing enrollees, time-limited
RAP	New plan, live July 1, 2026	New borrowers and anyone switching in
Tiered standard	Reworked fixed plan	New borrowers

Income-driven and standard plan status after the 2025 law.

The phase-out is staged, not a single cutoff. RAP goes live July 1, 2026, and from that date new borrowers get only RAP or the tiered standard plan. PAYE and ICR wind down by July 1, 2028. IBR runs straight through: if you are an existing borrower who wants income-driven terms and forgiveness, it is the lane that does not end.

The new-loan trap

This is the trap that catches people who do everything else right. Imagine you have carried a balance on IBR for years and then enroll in a graduate program in 2027 and borrow again. That single new loan can pull your entire balance, including the old loans you have been steadily paying, onto RAP terms. It might still be the right call to go back to school, but it is a decision worth making with the full repayment picture in front of you.

Model it before you borrow again

If you are considering more school or any new federal borrowing after mid-2026, run the numbers first. Compare what your loans cost on your current plan against what they would cost if a new loan moved everything to RAP. That comparison, not the sticker price of the new program alone, is the real cost of borrowing again.

Build your loan strategy

Sources

OBBBA, P.L. 119-21, Title VIII, Sec. 82001 (loan repayment; legacy plan phase-out)
U.S. Dept. of Education, repayment plan transition FAQ (2026)