The Department of Education's final rule implementing the One Big Beautiful Bill Act (OBBBA), released on May 1, 2026, includes a small piece of fine print that could cost some borrowers years of forgiveness progress. Buried in the regulatory language is a new restriction: payments made under the upcoming Repayment Assistance Plan (RAP) will not count toward forgiveness under Income-Based Repayment (IBR) if a borrower ever moves between the two plans.
For most families with a student in college today, this sounds like inside-baseball repayment talk. It is more important than that. The rule changes the long-term math on borrowing federal loans, and the decisions you make this summer about what to borrow can either avoid this trap or walk straight into it.
This guide explains what the restriction is, who it affects, and what families should do before July 1, 2026.
What the new rule actually says
Starting July 1, 2026, the Department of Education's RAP plan replaces the SAVE plan as the headline income-driven repayment option for new federal student loan borrowers. RAP payments range from 1% to 10% of adjusted gross income, with a 30-year path to forgiveness on remaining balances.
Existing income-driven plans like IBR, PAYE, and ICR remain available for some borrowers, with IBR forgiveness still hitting at 20 or 25 years depending on when the loans were originated.
Here is the new restriction. If a borrower is on IBR, switches to RAP, and later switches back to IBR, the months of payments made while on RAP do not count toward IBR's 20- or 25-year forgiveness clock. Those months are simply lost as forgiveness progress under IBR. The Department added this language despite public comments asking for the opposite.
Translation: once you move from IBR to RAP, you are essentially locked into RAP's longer 30-year forgiveness path. Going back to IBR means restarting that clock for the time spent in RAP.
Why this matters for families paying for college
If you are a parent reading this thinking "we are years away from repayment," that is exactly why this rule matters now. The forgiveness credit restriction is not a problem you fix in repayment. It is a problem you avoid by borrowing carefully today.
Three reasons it should change how families think about taking on federal loans:
First, the new repayment landscape is harder to navigate. Plans are no longer interchangeable. Choosing the wrong one can lock a borrower into 30 years of payments instead of 20.
Second, the friction discourages plan-switching. Income-driven repayment plans are most useful when borrowers can switch as their lives change — taking a lower-paying public service job, going through unemployment, or shifting careers. The new rule makes that flexibility costlier.
Third, the simplest defense is to borrow less. Every dollar a family avoids borrowing is a dollar that does not need a 20- or 30-year repayment plan in the first place.
Who this rule actually affects
The restriction applies most directly to:
- Borrowers who finished borrowing before July 1, 2026. They retain access to old IBR's 20- or 25-year forgiveness clock and could potentially switch between plans. They are now penalized for doing so.
- Borrowers with a mix of pre- and post-July 2026 loans. They may have access to both plans in different ways and face the most complicated decisions.
- Families who consolidate loans now to preserve IBR access. The June 30, 2026 deadline to consolidate Parent PLUS loans into Direct Consolidation Loans for IBR access is unchanged. But the new credit-loss rule means using IBR strategically just got harder.
If your student is starting college in fall 2026 with brand-new federal loans, IBR will not be available to them at all. They will be limited to RAP from day one. That actually simplifies their decision — but it also means their forgiveness path is now 30 years long instead of 20.
What about Public Service Loan Forgiveness?
Public Service Loan Forgiveness (PSLF) is the federal program that erases remaining loan balances after 10 years of qualifying payments and full-time work for an eligible employer (government, qualifying nonprofits).
For PSLF, the news is mixed:
- RAP payments do count toward PSLF, as long as all other PSLF eligibility criteria are met. So a borrower who works in public service can use RAP and still reach PSLF in 10 years.
- Parent PLUS borrowers cannot use RAP, which means new Parent PLUS loans are effectively cut off from PSLF unless the borrower consolidates into a Direct Consolidation Loan and enrolls in IBR before June 30, 2026.
- New rules let ED disqualify some employers from PSLF eligibility starting July 1, 2026. Credit already earned with an employer is preserved, but credit stops accruing if the employer is later disqualified.
For families with a child considering teaching, social work, public defense, military service, public health, or government work, the PSLF math still works under RAP. But the path is more fragile than it used to be.
What to do this summer if you have student loans or are about to take them
Whether you are a current borrower facing 2026 changes or a family about to send a student to college, the same principles apply.
If you have existing federal loans
- Consolidate Parent PLUS loans into a Direct Consolidation Loan before June 30, 2026 if you want continued PSLF or IBR access. After that date, new Parent PLUS loans cannot consolidate into RAP.
- Do not switch from IBR to RAP unless you are sure you want to stay there. Once you switch, the months spent in RAP cannot be reclaimed for IBR forgiveness if you change your mind.
- Track your payment count. Use the Federal Student Aid website to confirm how many qualifying payments you have made under each plan. This becomes more important as plans diverge.
- Apply for PSLF certification annually if you work in qualifying public service. Submit the PSLF Employment Certification Form so each year of credit is locked in.
If you are about to borrow for the 2026-27 school year
- Borrow only what you actually need. The simplest way to avoid forgiveness-rule complexity is to keep the balance small enough that you do not need forgiveness.
- Run the numbers on each school's net cost first. Sticker price often is not what families pay — but the borrowing required to bridge the gap varies enormously by school. Create your free CollegeLens plan to see what each school on your list would actually cost your family.
- Maximize free money first. File the FAFSA early, apply for institutional aid, and chase outside scholarships before turning to loans.
- Use federal subsidized loans before unsubsidized. Subsidized loans do not accrue interest while your student is in school. Unsubsidized loans do.
- Treat Parent PLUS loans as a last resort, not a first resort. With the new $20,000 annual cap and $65,000 lifetime cap per dependent student, plus the loss of access to RAP, Parent PLUS is no longer the flexible safety net it was before OBBBA.
If your student is starting graduate school
- Grad PLUS is gone for new borrowers starting July 1, 2026. Existing grad students are grandfathered for up to three years.
- The cheapest path through grad school just got harder. Private lenders are filling some of the gap, but at higher rates. Compare carefully.
A quick word on the politics
When a federal rule moves money in or out of forgiveness, families understandably wonder if it will be reversed. The realistic answer is that the regulations finalized on May 1, 2026 are the law families should plan around right now. Future administrations may change them. They may not. Plan for the rules in front of you.
If you are angry about the change, the right place to direct that energy is your representatives. The right place to focus your family's planning is on what you can control: how much your student borrows, what school they attend, and how aggressively you reduce your funding gap before loans are needed at all.
The simple framework families should use
The forgiveness-credit restriction is one piece of a much larger picture. The framework families should walk away with:
- Borrow less. Every dollar avoided today is one that does not need a forgiveness plan tomorrow.
- Choose schools by net cost. A school with strong aid often beats a school with a famous name.
- Lock in your plan choice carefully when repayment starts. Switching is no longer free.
- Use the next 60 days wisely. The June 30 consolidation deadline and the July 1 effective date for OBBBA changes are real.
If you want help running the numbers on what your family will actually owe — across multiple schools, multiple years, and the new repayment landscape — create your free CollegeLens plan. We will walk you through the gap and help you build a plan that does not depend on forgiveness rules holding still for 30 years.
Paying for college is hard. The rules keep shifting. But families who plan ahead — borrow less, compare more, and avoid lock-in traps — still come out ahead.
-- Sravani at CollegeLens