Federal Student Loan Rules to Tighten in 2026; Struggling Borrowers Advised to Act Now

Millions of federal student loan borrowers who are behind on payments face tighter collection efforts in 2026 as the loan system shifts after years of legal and policy changes. Nearly 10 million borrowers are in default, including about 3.4 million who have not been formally moved into the government’s default program, a figure that represents roughly a quarter of federal borrowers.

About 3 million more have missed payments but are not yet in default. An additional seven million borrowers in the SAVE plan may be required to switch to other repayment plans and resume payments sooner than expected after litigation paused SAVE payments for more than a year. The Education Department and loan experts urge borrowers to check repayment options now to avoid default, which can trigger wage garnishment, seizure of tax refunds and serious credit damage.

Income-driven repayment options are changing. Currently available plans include I.B.R., I.C.R. and PAYE. I.C.R. and PAYE are scheduled to be discontinued by July 1, 2028. I.B.R. will remain available to existing borrowers who do not take out new loans after July 1, 2026. A new Repayment Assistance Program (RAP) is scheduled to begin next July and is intended to become the sole income-driven option for new loans.

The Education Department recommends using the loan simulator and applying at StudentAid.gov.

Key Topics

Business, Federal Student Loans, Save Plan, Repayment Assistance Program, I.b.r, Wage Garnishment