Critical dates you cannot afford to miss in 2025-2028 as federal student loan programs undergo historic changes
The federal student loan landscape is undergoing the most significant transformation in decades. Between tax law changes, program eliminations, and new repayment options, borrowers face multiple critical deadlines that will permanently affect their repayment options, forgiveness eligibility, and tax liability. Missing these deadlines could cost you thousands of dollars or lock you out of affordable repayment plans forever.
After a period of 0% interest during SAVE forbearance, interest begins accruing again on all loans in SAVE forbearance. Payments are still not required, but balances will grow.
The American Rescue Plan Act of 2021 made student loan forgiveness tax-free at the federal level through December 31, 2025. Starting January 1, 2026, forgiveness under IDR plans will be considered taxable income at the federal level.
Final deadline for Parent PLUS borrowers to consolidate their loans and preserve access to income-driven repayment. This is the most critical deadline for Parent PLUS borrowers.
The Repayment Assistance Plan (RAP) becomes available. New borrowers and existing borrowers who take out new loans will only have access to RAP and the new Standard Plan.
New loans disbursed after this date face significant restrictions on forbearance and deferment options.
All borrowers currently on SAVE, PAYE, or ICR must transition to either IBR or RAP by this date. The Department of Education will automatically enroll borrowers who don't choose into RAP or the OBBBA Standard payment.
Decision Point: Switch to IBR now or wait for RAP in 2026?
URGENT: You have until June 30, 2026, to preserve income-driven repayment access
Tax Strategy: Complete forgiveness requirements by December 31, 2025
Action: Switch to IBR immediately - don't wait
WARNING: The biggest trap in the new system
Borrowers with loans before July 1, 2026, will eventually need to choose between Income-Based Repayment (IBR) and the new Repayment Assistance Plan (RAP):
| Feature | IBR (Old/New) | RAP |
|---|---|---|
| Payment Calculation | 10-15% of discretionary income (Income - 150% poverty line) | 1-10% of total AGI (No income protection) |
| Minimum Payment | $0 possible | $10 minimum always |
| Forgiveness Timeline | 20 years (new IBR) 25 years (old IBR) | 30 years for all borrowers |
| Interest Subsidy | Limited | Unpaid interest waived + $50 principal match |
| Better For | Income under ~$85K Want faster forgiveness Need $0 payment option | Very low balances High income ($90K+) Benefit from principal match |
General Rule: IBR typically has lower payments for borrowers earning under $80-85K annually. RAP may be better for higher earners or those with small balances who can benefit from the principal matching program. Run the numbers for your specific situation.
A significant change under OBBBA is that Parent PLUS borrowers who consolidate their loans before July 1, 2026, can now enroll directly in IBR without needing to go through ICR first. This gives them immediate access to 25-year forgiveness at 15% of discretionary income - which is actually MORE favorable than the new RAP plan that offers 30-year forgiveness. However, new Parent PLUS borrowers after July 1, 2026, will have no income-driven options at all and will be limited to the Standard Repayment Plan only.
Even though federal forgiveness is tax-free through 2025, five states currently tax student loan forgiveness:
If you live in one of these states, you may owe state income tax on forgiven amounts even when federally exempt. Some of these states also tax PSLF forgiveness. Check with a tax professional in your state.
These deadlines are firm and the consequences of missing them are severe. Here's what to do right now:
