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College graduates in the Class of 2026 are stepping into a radically different student loan landscape, one with fewer repayment options and stricter rules on debt forgiveness compared to previous years.
The revisions to the federal lending system follow the passage of President Donald Trump’s “big beautiful bill” last year and other policy changes enacted by the Trump administration.
Each year, roughly 2 million students earn bachelor’s degrees, according to the National Center for Education Statistics.
Roughly 60% of those students will have education loans, with an average balance of around $30,000, according to an analysis by higher education expert Mark Kantrowitz. The typical monthly student loan bill is $304.
Here’s what this year’s graduates should know about their federal student loans in light of the recent changes.
You still have 6 months before the first bill is due
One important safety net for federal student loan borrowers remains intact: Your first bill likely won’t be due until six months after you graduate, thanks to the government’s grace period, said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York.
Those with federal Perkins Loans can get up to nine months before they need to start repayment.
If your loans are subsidized, the government will pay the interest during the grace period, Kantrowitz said. Meanwhile, interest will accrue on unsubsidized loans.
“After the grace period, the loan status will switch to ‘In Repayment,'” Nierman said. “This will probably happen around December.”
The exact date will depend on factors including your loan details and your graduation date.
You should mark your calendar for around two weeks before your first payment is due to make sure you don’t miss it, Kantrowitz said.
Student loan repayment options are changing
Starting in the summer, college graduates should explore which repayment options might be best for them, said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
The options are shifting: Some plans have disappeared or will, while new options are set to launch this July.
The Biden administration-era Saving on a Valuable Education, or SAVE, plan — which came with some of the lowest monthly bills to date — is no longer available. Those graduating in the spring also won’t have access to the new Tiered Standard Plan, the U.S. Department of Education said.
But starting July 1, borrowers can enroll in the new Repayment Assistance Plan. Under RAP, monthly payments will typically range from 1% to 10% of your earnings; the more you make, the bigger your required payment. There will be a minimum monthly payment of $10 for all borrowers.
If all of your student loans were disbursed before July 1 of this year, you’ll also remain eligible for the following plans, according to the Education Department:
- Standard Repayment Plan
- Graduated Repayment Plan
- Extended Repayment Plan
- Income-Based Repayment Plan, or IBR
- Income-Contingent Repayment Plan, or ICR
- Pay as You Earn, or PAYE
“They can read about these plans and use a loan calculator to see both the monthly payment and long-term costs at Studentaid.gov,” Mayotte said.
“It’s important to not just look at the lowest monthly payment option, but more importantly, the lowest long-term cost options,” she added. “The name of the game is paying the least amount over time.”
Spring graduates who plan to return to school and end up borrowing student loans again, after July 1, will face more limited repayment options, Nierman said. They will have access only to the new Tiered Standard Plan and RAP, she added.
Federal loan forgiveness rules are tightening
After graduating, you should also see if you’re eligible for any state or federal debt forgiveness programs, consumer advocates said.
The Public Service Loan Forgiveness program, signed into law by former President George W. Bush in 2007, allows government and not-for-profit employees to have their federal student loans discharged after 10 years.
But Trump signed an executive order last year that said borrowers employed by organizations that do work involving “illegal immigration, human smuggling, child trafficking, pervasive damage to public property and disruption of the public order” will “not be eligible” for PSLF. Those changes are expected to go into effect in July, though they face legal challenges.
Consumer advocates have criticized the new restrictions, saying they could allow Trump officials to make any organization it doesn’t like ineligible for the program. In the meantime, with the PSLF help tool, borrowers can search for a list of employers that still qualify under the program.
Most state-level student debt forgiveness programs offer relief to borrowers in specific occupations, Kantrowitz said. For example, the Maine Dental Education Loan Repayment Program offers a total of $100,000 in student loan repayment assistance to dentists in underserved areas of the state.
Other state programs may offer forgiveness based on your finances rather than your occupation.
In New York, the Get On Your Feet Loan Forgiveness Program, rolled out in 2015, allows certain residents to get loan forgiveness for up to 24 months of their payments. Among other qualification requirements, borrowers must have an adjusted gross income of less than $50,000 a year.
The Institute of Student Loan Advisors has a database of student loan forgiveness programs by state.