Starting July 1, 2026, a new fixed repayment plan called the Tiered Standard Repayment Plan will be available for certain federal student loan borrowers. If you have Direct Loans made on or after July 1, 2026, it is important to understand how this plan works, who it applies to, and how it differs from income-driven repayment options.
How the Tiered Standard Plan Works
The Tiered Standard plan is a fixed monthly payment plan, meaning your payment amount does not change based on your income. Your repayment term is determined by your outstanding principal balance at the time you enter repayment:
- Under $25,000: 10-year repayment term
- $25,000–$49,999: 15-year repayment term
- $50,000–$99,999: 20-year repayment term
- $100,000 or more: 25-year repayment term
The minimum payment under this plan is $50 per month (or your outstanding balance if it is less than $50).
Who This Plan Applies To
The Tiered Standard plan is the default repayment plan for new Direct Loan borrowers on or after July 1, 2026, if you do not actively select a plan when you enter repayment. It is also the default plan for new Parent PLUS borrowers.
The following borrowers are eligible for this plan:
- Direct Loan borrowers with loans made on or after July 1, 2026
- Borrowers with Direct Consolidation Loans made on or after July 1, 2026
- Parent PLUS borrowers (new borrowers with first loan on or after July 1, 2026)
It is also important to note that the traditional Standard, Graduated, and Extended repayment plans will only remain available for loans made before July 1, 2026. For new loans, Tiered Standard is the only fixed repayment option.
Who Is NOT Eligible for Tiered Standard
Borrowers with Direct Loans made before July 1, 2026 are not subject to the Tiered Standard plan and will continue to have access to the traditional Standard, Graduated, and Extended repayment plans they were previously eligible for.
Switching Plans
If you are enrolled in the Tiered Standard plan, you have the option to switch to the Repayment Assistance Plan (RAP) after you enter repayment. Similarly, if you are on RAP, you may switch to Tiered Standard. These are the two plans available to new Direct Loan borrowers on or after July 1, 2026.
Important: Tiered Standard Does NOT Qualify for PSLF
This is one of the most critical details to understand about the Tiered Standard plan. Payments made under the Tiered Standard Repayment Plan do not count toward Public Service Loan Forgiveness (PSLF).
If you work for a qualifying public service employer and are pursuing PSLF, you will need to enroll in a qualifying repayment plan instead. The Repayment Assistance Plan (RAP) is the income-driven option available for new borrowers that does qualify for PSLF. Additionally, IBR, PAYE, ICR, and the 10-year Standard (for pre-July 1, 2026 loans) continue to qualify for PSLF where applicable.
If PSLF is a goal for you, it is important to make sure you are on a qualifying repayment plan as soon as possible, since payments on Tiered Standard will not count toward your PSLF payment total.
A Note on Parent PLUS Borrowers
New Parent PLUS borrowers whose first loan is on or after July 1, 2026 are only eligible for the Tiered Standard plan. They do not have access to income-driven repayment plans, including RAP, and therefore are not eligible for PSLF.
If you have questions about which repayment plan is right for your situation, or whether you may be impacted by these changes, the Savi team is here to help. Reach out to us anytime through your Savi account.