Student Loans

Know your options

• Income-driven repayment: These plans set your monthly payment as a share of your income. The SAVE plan is ending — starting July 1, 2026, a new “Repayment Assistance Plan” (RAP) sets payments at 1–10% of income (minimum $10/month) and forgives any balance after 30 years. IBR stays available for older loans.
• Public Service Loan Forgiveness (PSLF): Work full-time (30+ hours/week) for a government or nonprofit employer and make 120 qualifying monthly payments (about 10 years) — the remaining balance is forgiven, tax-free.
• When loans can be discharged: Federal loans can be wiped out for total and permanent disability, a closed school, or (rarely) “undue hardship” in bankruptcy. Forgiveness outside PSLF may be taxable starting in 2026.
• If you’re struggling: Deferment and forbearance can pause payments temporarily. Defaulting hurts your credit and can lead to wage garnishment and seized tax refunds — contact your servicer before it gets to that point.

Repayment is changing. The SAVE plan is being wound down; borrowers in it move to another plan starting July 1, 2026. For loans taken out after that date, the Repayment Assistance Plan (RAP) becomes the main income-driven option.

PSLF still exists. 120 qualifying payments while working full-time in public service gets the rest forgiven — but time spent in SAVE forbearance may not count, so many borrowers need to switch plans to keep their progress.

Discharge is narrow. Beyond PSLF, federal loans end early only for total and permanent disability, school closure, or a bankruptcy “undue hardship” finding (hard to win, though courts have eased it somewhat).

Watch the tax bill. The federal tax exemption on forgiven balances expired at the end of 2025, so non-PSLF forgiveness in 2026 or later may count as taxable income.

U.S. Dept. of Education — Federal Student Aid ↗