How Will the 2026 Changes to Student Loan Policy Affect Me?

 Posted on June 18, 2026 in Student Loans

The year 2026 will see some of the largest changes in decades to how student loans are issued and repaid. The new policies will take effect July 1, 2026, and will affect how loans are repaid, how much individuals can borrow, and how defaulted loans are handled.

If you’re struggling with debt and are concerned about how the changing legislation will affect you, a Wise County, TX debt relief lawyer can help you understand possible options going forward.

What Are the New 2026 Loan Repayment Plan Options?

The intent of the changes to student loan policy, according to the US Department of Education, is to simplify the loan repayment process. The vast majority of the older plans are being phased out, leaving just two options for anyone who borrows after July 1, 2026.

The Tiered Standard Plan

The Tiered Standard Plan comes with fixed payments over a period of 10, 15, 20, or 25 years. For high earners or those with very high loan debt, this plan may offer the lowest monthly payments.

The Repayment Assistance Plan

Payments for the Repayment Assistance Plan, or RAP, are based on your adjusted gross income. This is your total income minus some eligible deductions.

Payments for the RAP are between 1 and 10 percent of your income, depending on how much you earn per year. There is a $10 minimum monthly payment for those earning $10,000 or less annually. After 30 years of monthly payments, any remaining balance is forgiven.

The RAP is intended to keep interest from increasing the total amount owed on loans when only small monthly payments are made. When your monthly payment doesn't cover accrued interest, the government will waive the remaining interest amount. In addition to this, if your payment doesn't reduce your principal by at least $50, the government will cover the difference to make sure the balance goes down by at least $50 each month.

What if I Took All My Student Loans Out Before the 2026 Loan Repayment Changes?

Many borrowers, such as those on the SAVE plan, will be required to choose a new plan within 90 days of notification by their loan servicers. Other Income-Driven Repayment plans may be continued until they are phased out in a couple of years.

How Are Borrowing Limits and Parent PLUS Loans Affected by New Legislation?

Beginning July 1, 2026, Parent PLUS loans, which previously let parents borrow up to the full cost of attendance, will be capped at $20,000 per year per student. There will also be a $65,000 lifetime borrowing limit per student. Parent PLUS loans are not eligible for the RAP and must be repaid on the standard plan.

Graduate borrowing is capped at $20,500 a year, $100,000 for a lifetime. Professional student borrowing is capped at $50,000 and $200,000 lifetime.

What if My Student Loans Are in Default?

The government has already begun aggressively collecting on defaulted student loans. A loan generally enters default after about 270 days without payment. At this point, the Department of Education can order your employer to withhold up to 15 percent of your disposable pay through administrative wage garnishment (20 U.S.C. § 1095a).

Under the Treasury Offset Program, the government can also seize tax refunds and other federal payments, including some Social Security benefits. Once collection begins, it continues until the debt is paid or the default is resolved. Loan rehabilitation or consolidation can, however, stop collection.

What if I File for Bankruptcy Under the New Student Loan Policy?

As with previous student loan policies, filing for bankruptcy will not automatically eliminate student loan debt. Student loans are one of the debts that are generally non-dischargeable under federal bankruptcy law.

However, bankruptcy can still be a valuable tool for those feeling overwhelmed by their debt payments. It may be especially helpful for anyone previously relying on debt forgiveness or the deferment of the SAVE plan.

Chapter 13 bankruptcy is often used by individuals to eliminate many consumer debts and stop collection as soon as it is filed. This can free up income to put toward non-deferrable debts such as student loans, keeping them out of default and avoiding consequences like wage garnishment.

Call a Parker County, TX Bankruptcy Lawyer Today

With the government becoming more strict about student loan repayments, now is the perfect time to sit down with a professional and assess your overall debt picture. An experienced lawyer can review what debt relief tools are available to you as the new student loan policies take effect. 

Our Wise County, TX debt relief attorneys work directly with our clients. You'll always speak with an attorney, not a paralegal. We offer very fast turnaround times and can manage your case completely virtually if needed. Call Acker Warren P.C. at 817-752-9033 today to schedule your free consultation.