You have graduated, the first bill is six months out, and your entry-level paycheck also has to cover rent. Federal repayment is not one fixed track: the plan lineup changed on July 1, 2026, and the plan you land on decides both your monthly payment and how much you pay in total.
Your grace period, then a plan
Federal Direct Loans give you a grace period of six months after you graduate, leave school or drop below half-time enrollment. On a subsidized loan the Department of Education pays the interest during those six months; on an unsubsidized loan the interest is yours and keeps accruing. If you do nothing before the grace period ends, your servicer places you on a fixed-payment plan.
The 2026 plan lineup
Which plans you can use depends on when your loans were made. The SAVE plan ended in March 2026 under a court settlement, and the older income-driven plans are being phased out. The federal-vs-private lesson explains why these plans exist only on federal loans.
| Plan | Loans made before July 1, 2026 | Loans made on or after July 1, 2026 |
|---|---|---|
| Standard (10 years, fixed payment) | Yes | No |
| Graduated and Extended | Yes | No |
| Income-Based Repayment (IBR) | Yes: 10% of discretionary income for 20 years if you first borrowed on or after July 1, 2014; otherwise 15% for 25 years | No |
| PAYE and ICR | Phasing out; both end July 1, 2028 | No |
| Repayment Assistance Plan (RAP) | Yes, from July 1, 2026 | Yes |
| Tiered Standard | Yes, from July 1, 2026 | Yes |
If your loans are older and you sit on a plan that is going away, you have until July 1, 2028 to choose RAP, Tiered Standard or IBR. If your first loan was disbursed on or after July 1, 2026, RAP and Tiered Standard are your only two options.
RAP: the income-driven plan from 2026 on
RAP sets your payment as a percentage of your adjusted gross income (AGI), the income figure on your federal tax return, divided by 12 and reduced by $50 for each dependent you claim. The payment never drops below $10 a month.
| AGI | Payment per year |
|---|---|
| $10,000 or less | $120 ($10 a month) |
| $10,001 to $20,000 | 1% of AGI |
| $20,001 to $30,000 | 2% |
| $30,001 to $40,000 | 3% |
| $40,001 to $50,000 | 4% |
| $50,001 to $60,000 | 5% |
| $60,001 to $70,000 | 6% |
| $70,001 to $80,000 | 7% |
| $80,001 to $90,000 | 8% |
| $90,001 to $100,000 | 9% |
| Over $100,000 | 10% |
Two features make RAP different from the plans it replaced. If your payment is smaller than the month's interest, the unpaid interest is waived instead of piling onto your balance. And if your on-time payment cuts your principal by less than $50, the Department adds a matching payment of up to $50, so your balance falls every month you pay on time. After 360 qualifying payments (30 years) any remaining balance is forgiven. Parent PLUS loans are not eligible for RAP, and RAP payments count toward Public Service Loan Forgiveness.
Tiered Standard: a fixed payment sized to your balance
For loans made on or after July 1, 2026, the fixed-payment option is Tiered Standard: a level monthly payment over a term set by how much you owe when repayment starts, with a $50 minimum payment.
| Balance entering repayment | Term |
|---|---|
| Under $25,000 | 10 years |
| $25,000 to $49,999 | 15 years |
| $50,000 to $99,999 | 20 years |
| $100,000 or more | 25 years |
A longer term means a smaller payment and more total interest. You can always pay more than the minimum, and the loan payment calculator shows what any extra amount does to the payoff date.
Pausing payments: deferment and forbearance
If you lose your job or go back to school, two tools stop the required payment for a while. A deferment pauses payments for a defined reason; the Department pays the interest on subsidized loans during most deferments. A forbearance is a discretionary pause and interest accrues on every loan.
| Deferment | Forbearance | |
|---|---|---|
| Required payment | Paused | Paused |
| Interest on subsidized loans | Paid by the Department in most deferments | Accrues |
| Interest on unsubsidized loans | Accrues | Accrues |
| Limit | Depends on the deferment type | Up to 9 months in any 24-month period |
For loans made on or after July 1, 2027, the economic-hardship and unemployment deferments no longer exist; in-school, military and cancer-treatment deferments remain. A pause protects you from delinquency and default, both of which damage your credit score; it does not shrink the debt, and interest that accrues during a pause can capitalize onto your principal.
Refinancing: a lower rate, and everything you give up
Refinancing means a private lender pays off your loans and issues you a new one, usually because your credit now earns a lower rate. Refinance federal loans this way and they become private for good: no RAP, no IBR, no federal deferments, no PSLF. For private loans you already hold, refinancing is a straightforward rate comparison. For federal loans it trades a permanent safety net for a rate.
Public Service Loan Forgiveness
PSLF forgives the remaining balance on your Direct Loans after 120 qualifying monthly payments, made while you work full-time (an average of at least 30 hours a week) for a government agency or an eligible nonprofit. The payments need not be consecutive, and they must be made on an income-driven plan (including RAP) or the 10-year Standard plan. Certify your employment every year on studentaid.gov so the count is tracked as you go.
Whatever plan you choose, the payment has to fit inside a real budget. Your first budget and emergency fund shows how to make room for it, and the free budget tool holds the numbers with no account required.