Digital Library: Major July Changes to Federal Student Loan Repayment

By: Abby Shafroth

July 1, 2026 — Article

Beginning in July 2026, federal student loan repayment options are changing dramatically because of new “RISE” regulations implementing last summer’s reconciliation bill, the One Big Beautiful Bill Act (OBBBA) (Pub. L. No. 119-21, 139 Stat. 72), and also settlement of the litigation in Missouri v. Trump, No. 4:24-cv-00520 (E.D. Mo. Mar. 10, 2026) that resulted in the elimination of the SAVE repayment plan and vacatur of repayment regulations from 2023.

The repayment changes primarily apply to repayment of Direct Loans, which are both the most common type of federal student loan (90% of outstanding federal student loans are Direct Loans) and the only type that has been available to borrow since Federal Family Education Loan Program (FFEL) loans stopped being made in 2010 and Perkins Loans stopped being made in 2018. The impact of these changes on borrowers will differ depending not only on what type of loans the borrower has, but also on whether the borrower consolidates or takes out any new loans on or after July 1, 2026. Key changes for different groups of borrowers are summarized in this article. For more details, visit NCLC’s Student Loan Law, Chapter 3 “Pre-Default Repayment Options,” which has recently been updated online to reflect these major changes.