President Trump signed the bill into law on July 4, 2025, so it is no longer awaiting his signature. The law changes federal student-loan repayment options and borrowing rules, but the changes take effect on different dates. As of October 2026, borrowers can enroll in the new Repayment Assistance Plan (RAP) or Tiered Standard plan; what you can borrow or which plan applies to you depends on your loan type, disbursement dates and circumstances.
What changed—and what the law is called now
The law was signed on July 4, 2025. The Department of Education now calls it the Working Families Tax Cuts Act; its 2025 implementation materials used the name One Big Beautiful Bill Act. The Department’s 2026 final-regulation summary connects the two names. This article refers to it as the law.
For student-loan borrowers, the main changes are new repayment options, the phaseout of existing income-contingent repayment plans, new borrowing limits for graduate and professional students and parents, and the phaseout of Grad PLUS. The changes are not all effective at once. The Department issued preliminary implementation guidance in July 2025, followed by final-regulation materials and updated Federal Student Aid guidance. For decisions about your own loans, use the current Federal Student Aid information and confirm details with your servicer.
Which repayment plans can you choose?
Federal Student Aid describes a choice between income-based and fixed-payment plans. The law establishes two new options: RAP and Tiered Standard. Enrollment in both began July 1, 2026, according to the Department’s July 2026 fact sheet.
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Repayment Assistance Plan (RAP)
RAP is the new income-driven option identified in the Department’s final-regulation summary. Income-driven means the payment plan is based on income rather than being a fixed payment calculated solely from the amount borrowed. The sources summarized here do not establish enough detail to calculate an individual RAP payment or determine every borrower’s eligibility. Check Federal Student Aid’s current repayment guidance against your loan types and dates before selecting a plan.
Tiered Standard
Tiered Standard is a fixed-payment plan. The Department says its fixed term is selected according to the amount borrowed, but its public fact-sheet summary does not provide all the thresholds. Do not rely on a general article to estimate your term or payment; check the current official plan information for the amount and loan details that apply to you.
Existing income-contingent plans
The law phases out existing income-contingent repayment plans. The Department’s 2026 rule announcement says certain repayment plans are scheduled to sunset on July 1, 2028. That date applies to the plans specified in that announcement, not necessarily to every repayment provision in the law. Check current Federal Student Aid guidance to learn how a particular plan is affected and what options are available to you.
What happens if you do not choose a plan?
Federal Student Aid says borrowers with loans disbursed on or after July 1, 2026, who do not select a repayment plan will be placed on Tiered Standard. Because that default is tied to disbursement date, do not assume it applies to every borrower or every loan. If you have multiple loans, verify which disbursements and loan types are covered before deciding whether to make a selection.
How the law changes borrowing for graduate students, professionals and parents
The Department’s final-regulation summary says the law establishes new loan limits for graduate students, professional students and parents, and phases out Grad PLUS. The material available here does not state the specific new dollar limits or all the conditions for applying them, so no single limit should be treated as universal. Check current Federal Student Aid guidance for your program, loan type and borrowing period.
Grad PLUS
Grad PLUS is being phased out. The existence of a phaseout does not by itself establish whether a particular student can borrow under a transition rule; that depends on the applicable dates and circumstances. Confirm your eligibility with Federal Student Aid and your school’s financial-aid office before planning around Grad PLUS.
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Parent PLUS and transition rules
Parent PLUS borrowing is affected by the new limits, but transition rules matter. Federal Student Aid’s Parent PLUS guidance lists Standard, Graduated and Extended repayment options for parent borrowers without loans disbursed on or after July 1, 2026. It also describes a deadline-sensitive ICR exception for certain parent borrowers: they may become eligible for ICR by consolidating Parent PLUS loans into a Direct Consolidation Loan, if the consolidation and disbursement occur by July 1, 2026. That date has passed. Do not treat the exception as general eligibility advice; consult the current Parent PLUS guidance before taking any action.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When the main changes take effect
| Date | What official guidance says |
|---|---|
| July 4, 2025 | President Trump signed the law. |
| July 18, 2025 | The Department issued preliminary implementation guidance on income-based repayment, parent repayment options, part-time student loan limits, and borrower-defense and closed-school-discharge regulations. It said other major provisions would take effect in the following year or be phased in. Later rules and current borrower-facing guidance should be used for updated operational details. |
| May 1, 2026 | The Department published a final-regulations summary covering new loan limits, the Grad PLUS phaseout, RAP, Tiered Standard and a second rehabilitation opportunity for some borrowers in default. |
| July 1, 2026 | The Department said borrowers could enroll in RAP and Tiered Standard beginning on this date. Federal Student Aid says borrowers with loans disbursed on or after this date who do not select a plan will be placed on Tiered Standard. |
| July 1, 2027 | The Department’s April 2026 rule announcement identifies this date for specified rehabilitation, deferment and forbearance changes. |
| July 1, 2028 | The same announcement identifies this date for the sunset of certain repayment plans. |
The 2027 and 2028 dates apply to the provisions described in the Department’s April 2026 announcement; they are not a blanket effective date for the whole law.
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesWhat to check before changing your repayment or borrowing plans
- Identify each loan. Check whether it is a Direct, Parent PLUS, Grad PLUS or another federal loan, along with its disbursement date. A borrower’s loan type and dates can affect plan eligibility and transition rules.
- Review current Federal Student Aid repayment guidance. Compare the available income-based and fixed-payment options for your loans. Do not infer a payment amount or term from a plan name alone.
- Check Parent PLUS exceptions before consolidating. The ICR transition described by Federal Student Aid has a July 1, 2026 deadline. Because that deadline has passed, confirm current eligibility before relying on it or making a consolidation decision.
- Confirm implementation details with your servicer or school. Ask how the rules apply to your account, repayment status or planned borrowing. A general policy summary cannot determine your personal eligibility or payment.
The Department’s 2025 preliminary guidance also covered borrower-defense and closed-school-discharge regulations. Those topics involve separate claim rules; use current official claim guidance to assess a specific case rather than assuming that the law changes establish eligibility.
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