Education Department Unveils Key Guidance Ahead of July Student-Loan Overhaul

The Education Department issued updated guidance ahead of July 1, 2026 changes to federal student loans, clarifying how the new Repayment Assistance Plan (RAP) interacts with existing IDR plans and PSLF. RAP is a new income-driven option; RAP payments generally won’t count toward forgiveness under IBR/ICR/PAYE when switching plans (with a specific exception), but RAP will count toward PSLF. Existing PSLF‑qualifying plans remain eligible, while new borrowers after July 1 will face only RAP or the Tiered Standard plan. For borrowers with pre‑2026 loans, auto-recertification continues until the post‑July 1 loan enters repayment, at which point all loans must be repaid under RAP or Tiered Standard. Additional changes include new borrowing limits with an interim exception for current students. Those taking new federal loans after July 1 will be treated as “new borrowers” and lose access to legacy repayment options.