Federal Register Updates

• 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))

• 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

• 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

• 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 $10 monthly minimum
• 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)

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

• 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

• PSLF was addressed in a separate final rule published October 31, 2025 (not part of the RISE Final Rule)
• The May 1, 2026 RISE Final Rule explicitly references the October 31, 2025 PSLF rule as part of its regulatory baseline — the two rules operate together
• 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. The RISE Final Rule confirmed RAP as a PSLF-qualifying repayment plan
• Substantial illegal purpose exclusion (effective on or after July 1, 2026): § 685.219(c) provides that no payment shall be credited as a qualifying payment for any month in which a qualifying employer is no longer eligible (i.e., has been determined to have a “substantial illegal purpose”). Borrowers receive full credit for work performed until the effective date of the Secretary’s determination — payments are not retroactively stripped
• Process protections: employer notification and opportunity to respond before any adverse determination

• 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 on the consolidated balance — only RAP and Tiered Standard Repayment available
• Consolidation before July 1, 2026 preserves access to existing IDR plans for the consolidated loan
• Strategic timing of consolidation is critically important
• Weighted-average credit for forgiveness progress is preserved through consolidation under the final rule’s treatment of payment count carryover

• 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

• 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

• 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