Repayment is where a student loan is actually experienced: the monthly payment, the term, the total interest, and the programmes that forgive what remains. The federal system offers a menu of plans — Standard, Graduated, Extended, and the income-driven family — and the choice between them trades a lower payment now against more interest over time, and, for income-driven plans, eventual forgiveness against a longer commitment. The landscape changed materially in 2025 and 2026: the SAVE plan was ended by court order, a new Repayment Assistance Plan (RAP) was launched, and the older PAYE and ICR plans are scheduled to close. This guide compares the plans with worked payments, explains the income-driven formulas and the SAVE-to-RAP transition, states the forgiveness rules including the return of taxability, and covers consolidation, default, and refinancing. Rates and programme details are stated as verified for the 2026–27 period; the Department of Education and the loan servicer are the authoritative sources for any individual borrower’s position.

The standard plan: the baseline every other plan is measured against

The Standard Repayment Plan charges a fixed monthly payment over ten years (ten to thirty years for consolidated loans, by balance), and it is the default plan for borrowers who choose nothing. It has the highest monthly payment of the time-based plans and the lowest total interest, because the balance is cleared fastest. A $30,000 loan at 6.52% costs $340.95 a month and $40,913.92 in total, of which $10,913.92 is interest. A $10,000 loan at the same rate costs $113.65 a month and $13,637.97 in total. The standard plan is the right choice for borrowers who can afford the payment: it minimises interest, it ends the debt in a decade, and it keeps the borrower’s options open, because any borrower can switch to another plan later if circumstances change.

Graduated repayment starts lower and rises every two years over ten years (or up to thirty for consolidated loans), on the assumption that income rises. The early payments may cover little more than the interest, and the total interest exceeds the standard plan’s, because the balance falls more slowly. Extended repayment stretches the term to 25 years for borrowers with more than $30,000 in Direct loans, cutting the payment — $30,000 at 6.52% over 25 years costs $202.94 a month — but raising the total to $60,881.17, nearly double the amount borrowed. Extended and Graduated suit borrowers whose income will genuinely rise or who need the lower payment to stay current; they are expensive ways to buy breathing room, and the breathing room should have a purpose and an end date.

Income-driven repayment: the formulas, and which plans remain

Income-driven repayment (IDR) caps the monthly payment at a percentage of discretionary income — income above a threshold tied to the federal poverty guidelines — and forgives the remaining balance after a fixed number of years of qualifying payments. The surviving plans differ in the percentage, the threshold, and the forgiveness term. Income-Based Repayment (IBR): 10% of discretionary income for new borrowers after 1 July 2014 (15% for older borrowers), forgiveness after 20 years (25 for older borrowers). Pay As You Earn (PAYE): 10% of discretionary income, forgiveness after 20 years. Income-Contingent Repayment (ICR): the lesser of 20% of discretionary income or the 12-year standard amount, forgiveness after 25 years. Discretionary income is generally adjusted gross income minus 150% of the poverty guideline for the borrower’s family size and state (225% under the former SAVE plan, which no longer operates).

The plan landscape changed in 2025–26. The SAVE plan, which had offered 5% of discretionary income for undergraduate loans and a 225% poverty threshold, was ended by court order — the Eighth Circuit’s judgment of 10 March 2026 struck it down, and the Department of Education has wound it down, moving affected borrowers to other plans. The Repayment Assistance Plan (RAP), created by the 2025 reconciliation law, launched on 1 July 2026: payments of 1% to 10% of adjusted gross income on a sliding scale, reduced by $50 a month per dependent, with a $10 monthly minimum, forgiveness after 30 years, and an interest-subsidy element that waives unpaid interest in defined circumstances. PAYE and ICR are scheduled to close to new enrolment no later than 1 July 2028, with existing borrowers transitioned. IBR remains open. The practical consequence: a borrower choosing an income-driven plan in 2026–27 chooses between IBR and RAP, and should compare them on the borrower’s own income, family size, and loan balance — RAP’s lower percentages help low earners, its 30-year term costs high earners more time, and the forgiveness tax treatment applies to both.

Forgiveness: the programmes, the timelines, and the tax bill

Three forgiveness routes matter for most borrowers. IDR forgiveness cancels the balance remaining after 20, 25, or 30 years of qualifying payments, depending on the plan. Public Service Loan Forgiveness (PSLF) cancels the balance after 120 qualifying monthly payments — ten years — while employed full-time by a qualifying government or non-profit employer, under a qualifying repayment plan. Teacher Loan Forgiveness cancels up to $17,500 (up to $5,000 for most teachers, $17,500 for highly qualified mathematics, science, and special education teachers) after five consecutive years in a qualifying low-income school. Borrower defence and closed-school discharges cancel loans where the school misled the borrower or closed, and total and permanent disability discharge cancels loans on qualifying disability — all subject to application and evidence, and none automatic.

Forgiveness is taxable again. The exclusion of discharged student loan debt from taxable income that applied to discharges from 2021 through 2025 closed at the end of 2025, and from 2026 a forgiven balance is generally taxable income in the year of forgiveness, unless another exclusion applies (PSLF discharges have historically been treated as non-taxable, and insolvency and other exclusions may apply). A borrower facing $40,000 of IDR forgiveness at a 22% marginal rate faces an $8,800 tax bill in the forgiveness year — a liability that should be saved for across the repayment term, not discovered at the end of it. The tax treatment is the single most underappreciated cost of income-driven repayment, and it is the reason the lower payment of an IDR plan should be compared with the standard plan on total cost including the eventual tax, not on the monthly payment alone.

Choosing a plan, switching, and refinancing

Choose by total cost for the borrower’s expected income path, not by the monthly payment alone. A borrower with stable, adequate income should take the Standard plan and pay the least interest. A borrower with low or uncertain income should take an income-driven plan for the protection it gives — the payment falls when income falls, and the balance is forgiven after the term — accepting the higher total cost and the eventual tax bill as the price of that protection. A borrower whose income will rise sharply (a medical resident, a lawyer in the early years) may take Graduated or an IDR plan for the lean years and switch to Standard or accelerate payments as income rises. Switching between federal plans is permitted, with the servicer recalculating the payment; capitalised interest on switching is a cost to confirm before moving, because unpaid interest may be added to the principal at the switch.

Refinancing — replacing federal loans with a private loan at a lower rate — is a one-way decision: the federal protections, the income-driven options, and the forgiveness programmes are forfeited permanently, and the lower rate must compensate for that loss over the whole remaining term. It suits borrowers with high, stable incomes, strong credit, and no need for federal protections, who will clear the debt quickly and value the rate saving over the safety net. For everyone else, the safety net is worth more than the rate saving. Never refinance federal loans into a private loan on the basis of the monthly payment alone, and never refinance while an IDR or PSLF path is in progress, because the qualifying payments already made are lost with the federal loans.

Public Service Loan Forgiveness: the 120-payment path

PSLF forgives the remaining balance on Direct loans after 120 qualifying monthly payments — ten years of payments — made while the borrower is employed full-time by a qualifying employer: a federal, state, local, or Tribal government, or a qualifying non-profit organisation. The payments need not be consecutive, but they must be made under a qualifying repayment plan (an income-driven plan, or the Standard plan) and for the full amount due, on time. The 120 payments are counted from the borrower’s records with the servicer and the Department of Education, and the count should be verified annually through the PSLF Help Tool and the employer’s certification form, because the most common PSLF failure is a counting error discovered at year nine.

PSLF’s value is greatest for borrowers with high balances relative to income — the classic case is a graduate with $150,000 of debt and a $60,000 public-service salary, whose income-driven payments over ten years cover a fraction of the balance and whose forgiveness is large. For borrowers whose standard payment would clear the debt in ten years anyway, PSLF adds nothing. The programme’s history includes a period of very low approval rates, driven by servicing and counting errors, and a series of temporary waivers that corrected many of them; the current process is more reliable, but the discipline of annual certification and record-keeping remains the borrower’s responsibility, and the records should be kept for the full ten years and beyond.

Frequently asked questions

What is the standard student loan repayment plan?

A fixed monthly payment over 10 years. $30,000 at 6.52% costs about $341 a month and $40,914 in total. It has the highest payment of the time-based plans and the lowest total interest, and it is the default for borrowers who choose nothing.

What happened to the SAVE plan?

SAVE was ended by court order: the Eighth Circuit’s judgment of 10 March 2026 struck the plan down, and the Department of Education wound it down, moving affected borrowers to other plans. The replacement, the Repayment Assistance Plan (RAP), launched on 1 July 2026.

What is the RAP student loan plan?

The Repayment Assistance Plan, launched 1 July 2026: payments of 1%–10% of adjusted gross income on a sliding scale, reduced by $50 a month per dependent, with a $10 monthly minimum and forgiveness after 30 years. It replaced SAVE as the new income-driven option alongside IBR.

Is forgiven student loan debt taxable?

From 2026, generally yes — the exclusion that covered discharges from 2021 through 2025 closed at the end of 2025, so a forgiven balance is usually taxable income in the year of forgiveness. Plan for the tax bill across the repayment term; PSLF discharges have historically been treated as non-taxable.

How does Public Service Loan Forgiveness work?

After 120 qualifying monthly payments (10 years) under a qualifying plan while employed full-time by a qualifying government or non-profit employer, the remaining Direct loan balance is forgiven. Certify employment annually and verify the payment count — counting errors are the most common failure.

Should I refinance my federal student loans?

Only if you have high, stable income, strong credit, and no need for federal protections — refinancing forfeits income-driven repayment, forgiveness, and discharge options permanently. Never refinance while pursuing IDR forgiveness or PSLF, and never decide on the monthly payment alone.