Millions at Risk of Losing PSLF Benefits by 2026

Overview of the New Repayment Assistance Plan (RAP)

The new Repayment Assistance Plan (RAP) is set to replace most existing income-driven repayment plans starting July 1, 2026. This change will affect borrowers currently enrolled in the SAVE, PAYE, or ICR plans, requiring them to transition into a modified version of IBR or RAP between July 1, 2026, and June 30, 2028. Borrowers using the SAVE plan are expected to make this switch closer to the start date in 2026.

RAP calculates monthly payments based on a sliding percentage of a borrower’s adjusted gross income, beginning at 1% and increasing up to 10%. This structure aligns with previous income-driven plans, and RAP will continue to qualify for Public Service Loan Forgiveness (PSLF), provided borrowers make 120 on-time monthly payments while working in eligible public service jobs.

Flexibility in Repayment Plans

Borrowers have the flexibility to switch between RAP and the standard repayment plan at any time. However, the key challenge lies in understanding which loans and payment plans qualify for PSLF and which do not. This requires careful attention to deadlines and consolidation rules, especially for those already on a path toward loan forgiveness.

Past Payments Still Count

For borrowers who have already made progress toward PSLF under SAVE, PAYE, ICR, or IBR, the law offers some relief. Qualifying payments made before switching to RAP or the amended IBR will still count toward the 120-payment requirement for PSLF. Additionally, qualifying payments from previous income-driven repayment plans will contribute to RAP's 360 payment count threshold for loan forgiveness.

This ensures that both regular borrowers and public service borrowers aren't starting from scratch when repayment plans change. However, tracking these qualifying payments remains the borrower's responsibility, particularly for PSLF and certifying employment status.

It's important to note that the payment count tracking does not go both directions. While all prior IDR plan payments count toward RAP loan forgiveness, if an eligible borrower switches from RAP back to IBR, the RAP payments will not count toward IBR's 20 or 25-year loan forgiveness. This means that while borrowers can switch plans, it may not be advantageous to use a lower RAP payment and then move to IBR for longer-term forgiveness.

Parent PLUS Loans and Eligibility

One of the most significant changes affects Parent PLUS borrowers. Starting July 1, 2026, Parent PLUS loans will no longer be eligible for income-driven repayment plans. These loans will only be available under the Standard Repayment Plan, which does not support PSLF effectively. Although the standard plan technically qualifies for PSLF, the 10-year term typically repays the loan before any forgiveness becomes available.

Currently, some Parent PLUS borrowers can consolidate their loans and repay under the Income-Contingent Repayment (ICR) plan, making them eligible for PSLF if they work in public service. However, this option will close for new Parent PLUS loans by June 30, 2026. Existing borrowers who consolidate before this date may still have access to ICR and eventually shift into the amended version of IBR. Those who wait too long could lose all access to forgiveness, even if their employment would otherwise qualify.

Time Matters for Borrowers

The new law introduces a compressed timeline, especially for Parent PLUS Loan borrowers. All current PSLF-eligible repayment plans will sunset between July 1, 2026, and June 30, 2028. Existing borrowers will migrate to an amended IBR version, but it's crucial to check your loans to remain PSLF eligible.

For Parent PLUS borrowers, the situation is even more urgent. The opportunity to consolidate into a PSLF-eligible repayment plan ends on June 30, 2026. Consolidation and enrolling in a repayment plan take time, often a month or two. Borrowers should start the process as early as possible to avoid missing critical deadlines.

This tight schedule creates the risk that many borrowers, especially those not tracking these changes, could lose access to PSLF without realizing it. A missed deadline or misunderstanding about loan type or consolidation timing could end forgiveness eligibility altogether.

What Borrowers Need to Know Moving Forward

The shift to RAP simplifies repayment plans but narrows options for future borrowers who rely on PSLF. For workers already on track for forgiveness, you'll migrate into IBR and continue earning PSLF qualifying payment credits. However, tracking your loans is essential.

Future borrowers, especially those considering Parent PLUS loans, will need to be more strategic. Without access to PSLF, these loans become more rigid and potentially more expensive than private loans. The Department of Education has yet to issue detailed timelines on when existing borrowers will migrate plans, but formal rules and system updates are expected later this year.

Until then, tracking your loans, employment, and deadlines is the safest way to preserve eligibility.