Federal Legislation Watch

Federal Register Updates

RISE NPRM — Proposed Changes to Federal Student Loan Programs

Last Updated: March 3, 2026 | Source: 91 FR 4254 (Published January 30, 2026)

The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, included significant changes to federal student loan programs. The Department of Education published proposed implementing regulations — the RISE NPRM (Reimagining and Improving Student Education) — in the Federal Register on January 30, 2026 (91 FR 4254). The public comment period closed on March 2, 2026. A final rule is expected to follow, after which loan servicers will update their systems. Below are the 10 major changes, updated with confirmed details from the NPRM regulatory text.

Implementation Process Timeline

1. Legislation Passed

July 2025 — OBBBA signed into law

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2. Negotiated Rulemaking

Nov 2025 — Committee reached consensus

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3. Public Comment Period

Closed Mar 2, 2026 — NPRM published as 91 FR 4254

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4. Final Rule Publication

Current Stage — Awaiting final regulations

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5. Servicer Implementation

Future — Servicers update processing systems

Approved Changes to Federal Student Loan Programs

1Income-Based Repayment (IBR) — Income Cap RemovedNPRM Confirmed

Regulatory Authority: 34 CFR § 685.209(c)(3)(i) | OBBBA § 82001(f)

Classic IBR (pre-July 1, 2014 borrowers) and IBRNB (post-July 1, 2014 borrowers) continue without forced transitions
IBR serves as the default option for borrowers with loans not eligible for the RAP Plan
Critical Change: Partial financial hardship (PFH) eliminated as a condition of entry into IBR — all borrowers qualify regardless of income level
Payment formula: 15% of AGI above 150% of the Federal Poverty Level
IBR remains available indefinitely for pre-7/1/26 loans — it is not being sunset
Only restriction: Borrowers with 60+ qualifying REPAYE payments may not enroll in IBR (§ 685.209(c)(3)(ii))

Impact: Borrowers previously told they earn “too much” for IBR now qualify. This is especially significant for borrowers in SAVE forbearance who need alternative repayment options. The NPRM confirms IBR as the primary long-term IDR plan for existing borrowers.

2Pay As You Earn (PAYE) — Closed to New EnrollmentsNPRM Confirmed

Regulatory Authority: 34 CFR § 685.209(c)(4)(iv)

PAYE is effectively closed. The NPRM requires a borrower “was repaying a loan under the PAYE plan on July 1, 2024” to remain eligible
Cannot newly enroll in PAYE — had to already be on it as of 7/1/24
Cannot return to PAYE after switching to another plan
Taking a new Direct Loan on or after 7/1/26 triggers loss of PAYE eligibility
Full sunset: PAYE is eliminated entirely on June 30, 2028 — even grandfathered borrowers must move to IBR or RAP

Impact: Current PAYE borrowers need a transition plan well before 6/30/28. IBR (if pre-7/1/26 loans) or RAP are the options. Do not take new loans after 7/1/26 if currently on PAYE.

3SAVE/REPAYE Plan — Closes June 30, 2028NPRM Confirmed

Regulatory Authority: 34 CFR § 685.209(c)(2)

SAVE/REPAYE closes to new enrollment on June 30, 2028
Existing SAVE borrowers are grandfathered and can continue through the sunset date
Plan currently in forbearance due to ongoing litigation
Borrowers must not have received a new Direct Loan on or after 7/1/26 to remain eligible
Existing SAVE borrowers will need to transition to IBR or RAP before the 6/30/28 sunset

Impact: Borrowers in SAVE forbearance should evaluate IBR as an immediate alternative. The SAVE plan’s future depends on both the litigation outcome and the 2028 sunset date, whichever comes first.

4RAP Plan Introduction (July 1, 2026)NPRM + Detail

Regulatory Authority: 34 CFR § 685.209(b)(2), § 685.209(c)(6)

RAP Plan (Repayment Assistance Plan) becomes available for new borrowers on July 1, 2026
All existing IDR plans sunset for loans made on or after this date — new borrowers limited to Standard or RAP
Payment formula: 1% of income per $10,000 borrowed (progressive rate), with a $0 minimum payment
Dependent deduction: $50 per dependent subtracted from monthly payment
Interest subsidy: 100% interest subsidy — unpaid interest does not capitalize
Principal matching: Up to $100/month applied to principal when payment exceeds interest amount
Forgiveness: 360 qualifying payments (30 years)

New NPRM Detail: The NPRM adds the principal matching provision (up to $100/month) which was not part of the November consensus. This rewards borrowers whose payments exceed their monthly interest accrual, accelerating principal reduction.

Impact: RAP creates a clear dividing line between “old rules” (pre-7/1/26) and “new rules” (post-7/1/26). The $0 minimum and interest subsidy provide a strong safety net, while principal matching rewards higher payments. Loan timing becomes critically important for preserving plan options.

5Parent PLUS Borrower OptionsNPRM + Detail

Regulatory Authority: 34 CFR § 685.209(b)(6), (c)(3)(i), (c)(5), (d)(2), (d)(3) | § 685.220(h)(2) | OBBBA § 82001(f)

The NPRM clarifies that the regulations use a two-gate system — both borrower eligibility and loan eligibility must be satisfied for IBR access:

Gate 1: Borrower Eligibility ✓

§ 685.209(c)(3)(i): “any Direct Loan borrower may repay under the IBR plan” — PFH removed by OBBBA § 82001(f). Parent PLUS borrowers pass this gate.

Gate 2: Loan Eligibility ✗

§ 685.209(d)(2): IBR covers “Direct Consolidation Loans that are not excepted consolidation loans” — a Parent PLUS consolidation loan is “excepted” by default, blocking IBR.

How to unlock IBR: § 685.209(b)(6)(ii) excludes a loan from “excepted” status if it “was being repaid under ICR, PAYE, or IBR on any date on or after July 4, 2025, through and including June 30, 2028.” Being repaid = at least one payment made.
Existing clients already on ICR: Loan is not “excepted” → can switch directly to IBR now
New clients: Must consolidate → enroll in ICR → make at least one payment → then apply for IBR
No urgency on the switch: The grandfathering window runs July 4, 2025 through June 30, 2028 — plenty of time
Consolidation deadline: Must consolidate before 7/1/26. Post-7/1/26 consolidation loans limited to RAP or Tiered Standard only (§ 685.220(h)(2))
ICR itself sunsets on June 30, 2028 — after that date, RAP becomes the sole IDR option for Parent PLUS

Correct pathway for new Parent PLUS clients: Parent PLUS → Consolidate (before 7/1/26) → ICR (make 1+ payment) → IBR. One ICR payment between 7/4/2025 and 6/30/2028 is sufficient to unlock IBR access.

Impact: Parent PLUS borrowers have a strategic window. The consolidation deadline (7/1/26) is more urgent than the IBR switch (6/30/28). Borrowers should consolidate promptly, enroll in ICR, and plan the IBR transition at their own pace before 2028.

6Public Service Loan Forgiveness (PSLF) ProvisionsSeparate Final Rule

Regulatory Authority: 34 CFR § 685.219, § 685.220 | FR 2025-19729 (Published October 31, 2025)

PSLF was addressed in a separate final rule published October 31, 2025 (not part of the RISE NPRM)
PSLF program continues with existing 120-payment requirement for qualifying public service employment
Available regardless of whether borrower is on “old rules” or “new rules” repayment plans
Both IBR and RAP payments count toward the 120 qualifying payments
New provision: “Substantial illegal purpose” employer exclusion added — employers engaged in substantial illegal activity may not qualify
No other changes to qualifying employer criteria or employment certification requirements

Impact: PSLF stability provides certainty for public service workers. The program continues to operate as established. The “substantial illegal purpose” exclusion is narrowly targeted and unlikely to affect the vast majority of qualifying employers.

7Consolidation and Mixed-Cohort Borrowers⚠ AWAITING FINAL RULE

Regulatory Authority: 34 CFR § 685.220

Borrowers who consolidate loans from different time periods (pre- and post-July 1, 2026) create a “mixed cohort”
Consolidation after July 1, 2026 that includes any post-July 1, 2026 loans converts the entire consolidated loan to “new rules”
This means loss of access to IBR, PAYE, ICR, and SAVE — only RAP and Standard Repayment available
Consolidation before July 1, 2026 preserves access to existing IDR plans
Strategic timing of consolidation is critically important
Weighted-average credit for forgiveness progress is expected to be preserved, but CFR references remain unclear

⚠ Still Uncertain: The NPRM CFR section references for forgiveness credit transfer during consolidation remain unclear. The final rule is needed to confirm whether consolidation erases or preserves previous forgiveness progress. Borrowers should wait for final regulations before making consolidation decisions that could affect progress.

Impact: Consolidation timing is one of the most critical strategic decisions under the new framework. Until the final rule clarifies forgiveness credit preservation, proceed with caution.

8Dual-Track Repayment StructureNPRM Confirmed

Regulatory Authority: 34 CFR § 685.209, § 685.210(a)(3), § 685.221

Historic Change: A single borrower can have two different income-driven repayment plans simultaneously
Pre-July 1, 2026 loans can remain on IBR; post-July 1, 2026 loans must be on RAP
Each plan calculates separately based on the borrower’s income, using different formulas
Pre- and post-7/1/26 loans are managed independently — taking a new loan does not force old loans off IBR
This dual-track system has never existed in federal student loan programs before

NPRM Confirmation: § 685.210(a)(3) explicitly establishes dual-track management. Old loans retain their plan eligibility independently of new loans. This is a key protection for existing borrowers who may need future education loans.

Impact: Creates unprecedented complexity but also protects existing borrowers. A borrower could make IBR payments on older loans and RAP payments on newer loans simultaneously. Careful tracking of which loans are under which plan is essential.

9Deferment and Forbearance Restrictions (July 1, 2027)NPRM + Detail

Regulatory Authority: 34 CFR § 682.210, § 682.211, § 685.204, § 685.205

Unemployment deferments: Eliminated for loans made after July 1, 2027
Economic hardship deferments: Eliminated for loans made after July 1, 2027
Forbearance cap: Maximum of 9 months in any 24-month period (down from unlimited)
Restrictions apply only to new loans disbursed after July 1, 2027
Pre-7/1/27 loans retain current deferment and forbearance provisions

NPRM Detail: The 9-month-per-24-month forbearance cap was specified in the NPRM regulatory text. This specific limit was not in the November consensus language.

Impact: Post-July 2027 borrowers face significantly reduced safety nets during financial difficulty. Income-driven repayment plans (RAP) become even more critical as the primary option during hardship periods.

10Loan Rehabilitation ProvisionsNPRM + Detail

Regulatory Authority: 34 CFR § 682.405, § 685.211

Twice per lifetime: Borrowers can now rehabilitate defaulted loans twice instead of once
New minimum payment: $10 monthly minimum during rehabilitation for loans made after July 1, 2027 (increased from $5)
Provides additional opportunity for borrowers who re-default after initial rehabilitation
More forgiving policy for borrowers struggling with default cycles

NPRM Detail: The $10 minimum rehabilitation payment for post-7/1/27 loans was specified in the NPRM. The November consensus established twice-per-lifetime but did not specify the payment amount.

Impact: Borrowers who have already rehabilitated once and subsequently re-defaulted now have another opportunity to exit default. The $10 minimum remains manageable while providing needed flexibility.

Critical Implementation Dates

July 1, 2026

RAP Plan Available & IDR Sunset for New Loans

RAP Plan becomes available. All existing IDR plans (ICR, IBR, PAYE, SAVE) sunset for any loans made on or after this date. Creates “old rules” vs. “new rules” dividing line. Parent PLUS borrowers must consolidate before this date to preserve the IBR pathway.

July 1, 2027

Deferment Elimination & Forbearance Restrictions Begin

Unemployment and economic hardship deferments eliminated for new loans. Forbearance limited to 9 months in any 24-month period. Loan rehabilitation minimum increases to $10.

June 30, 2028

ICR, PAYE, and SAVE/REPAYE Sunset — Parent PLUS IBR Window Closes

ICR, PAYE, and SAVE/REPAYE are fully eliminated. Parent PLUS borrowers must have at least one ICR payment on record before this date to unlock IBR access via the § 685.209(b)(6)(ii) grandfathering provision.

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