There is no student loan relief extension in the pandemic sense in 2026. The broad federal payment pause ended in October 2023, the follow-up on-ramp ended in October 2024, and no comparable blanket suspension has replaced them. What you do have are the standing tools of the federal loan system: income-driven repayment, deferment and forbearance for financial hardship, Public Service Loan Forgiveness, and a new Repayment Assistance Plan launching July 1, 2026. Each one lowers or pauses payments for borrowers who qualify, and most of them require you to apply.
Why the Pandemic Pause Is Gone
The CARES Act suspended payments and set interest to zero on federally held loans starting in March 2020.1U.S. Bureau of Economic Analysis (BEA). How Did Provisions of the 2020 CARES Act Related to Student Loan Debt Affect BEA’s Estimates Executive extensions kept the pause alive until interest resumed on September 1, 2023, and payments came due that October. The Department of Education then added a 12-month on-ramp through September 30, 2024, during which missed payments were not reported to credit bureaus and did not push borrowers into default.2National Credit Union Administration. Resumption of Federal Student Loan Payments Since October 2024, missed payments carry the full consequences again, including credit damage and eventual collection.3Congressional Research Service. The Potential Increase in Federal Student Loan Defaults in Fall 2025
The SAVE plan, briefly the most generous income-driven option, is also gone. A court-approved settlement ended it in early 2026, and borrowers whose loans were parked in forbearance during the litigation must now pick a new plan or their servicer will pick one for them.4Federal Student Aid. IDR Plan Court Actions – Impact on Borrowers Interest accrued during that forbearance. Payments you made under SAVE or REPAYE before the forbearance still count toward PSLF and other IDR forgiveness tracks, but no forgiveness will be granted under SAVE or REPAYE themselves.
Income-Driven Repayment Plans Still Open
Three legacy income-driven plans remain available, and each has a hard cutoff tied to July 1, 2026. If you take out a new loan or consolidate after that date, you lose access to all three and can only enroll in the new Repayment Assistance Plan.
- Income-Based Repayment (IBR): Payments capped at 10% or 15% of discretionary income, depending on when you first borrowed, with forgiveness after 20 or 25 years. Closed to anyone who takes out or consolidates a loan after July 1, 2026.
- Pay As You Earn (PAYE): Payments of 10% of discretionary income, forgiveness after 20 years. Not available if you have any loan issued or consolidated on or after July 1, 2026.
- Income-Contingent Repayment (ICR): The lesser of 20% of discretionary income or a fixed 12-year payment adjusted for income, with forgiveness after 25 years. Also closed after July 1, 2026.
If you have a Parent PLUS loan and want any income-driven option, you have to consolidate it before July 1, 2026, and enroll in an IDR plan before July 1, 2028.
The Repayment Assistance Plan Starting July 2026
The Repayment Assistance Plan, created by P.L. 119-21, replaces the discretionary-income formula with a sliding scale based on your full adjusted gross income.5Congressional Research Service. The Repayment Assistance Plan (RAP) in P.L. 119-21 The percentage starts at 1% just above $10,000 in AGI and climbs one point per additional $10,000, capping at 10%. Borrowers with AGI of $10,000 or less pay the $10 monthly minimum. Each dependent knocks $50 off your monthly payment, but never below that $10 floor.
RAP also matches principal: if your monthly principal payment is under $50, the government adds the lesser of $50 or your full monthly payment as an extra principal reduction. Unpaid monthly interest is not charged to you while your payment doesn’t cover it. Forgiveness comes after 360 monthly payments, or 30 years. Subsidized, unsubsidized, Grad PLUS, and most consolidation loans qualify. Parent PLUS loans and any consolidation loan that includes a Parent PLUS do not.5Congressional Research Service. The Repayment Assistance Plan (RAP) in P.L. 119-21
For borrowers with AGI at or below $80,000, RAP often produces a lower payment than the legacy plans. The catch is the $10 floor. Some borrowers on older plans qualified for a true $0 monthly payment; under RAP, no one does.
Pausing Payments Through Deferment or Forbearance
Deferment and forbearance are the closest things to a “pause” in the current system. They are not new relief; they have existed for decades and remain the standard tool for borrowers in temporary financial trouble.
Economic Hardship Deferment
You qualify if your monthly income is below 150% of the federal poverty guideline for your family size. Under the 2026 guidelines, that is $23,940 a year for a single person and $49,500 for a family of four in the 48 contiguous states.6U.S. Department of Health and Human Services. 2026 Poverty Guidelines – 48 Contiguous States Borrowers receiving SNAP, TANF, or other means-tested public assistance also qualify, as do Peace Corps volunteers.7Federal Student Aid. Economic Hardship Deferment Request Deferment is granted one year at a time up to a maximum of 36 months. Interest does not accrue on subsidized loans during the deferment but does on unsubsidized loans.
Unemployment Deferment
Borrowers receiving unemployment benefits can defer by submitting documentation of their eligibility for those benefits.8Federal Student Aid. Unemployment Deferment Request Borrowers who are not receiving benefits but are actively looking for work and registered with an employment agency can also qualify.
Public Service Loan Forgiveness and Buyback
PSLF forgives your remaining Direct Loan balance after 120 qualifying monthly payments while working full-time for a qualifying public service employer. Updated regulations take effect July 1, 2026, and the program was not affected by the SAVE litigation.
The PSLF Buyback option addresses months lost to forbearance or deferment, including the SAVE-related forbearance, that would otherwise have counted toward the 120. Any borrower who missed qualifying months due to forbearance or deferment after 2007 can use it. Once your qualifying employment through February 2026 is reflected in your studentaid.gov account, you submit a PSLF Reconsideration request. If approved, you get a buyback agreement showing what you owe for the missed months, and you have 90 days to pay.
The amount is calculated from what your IDR payment would have been during the gap. If you were on an IDR plan just before or after the forbearance and the gap was under a year, the Department uses the lower of the two surrounding payments. If you weren’t in an IDR plan, the Department pulls your tax information and calculates what your payment would have been. Overpayments are refunded.
The Tax Bill on Forgiveness Changes in 2026
This one catches people off guard. The American Rescue Plan Act made forgiven student loan balances federally tax-free, but only for loans discharged between January 1, 2021, and December 31, 2025. Starting in 2026, any balance forgiven through an income-driven repayment plan is generally treated as cancellation of debt income and taxed at your ordinary rate.9Taxpayer Advocate Service. What to Know About Student Loan Forgiveness and Your Taxes Your servicer sends a Form 1099-C in January or February of the year after forgiveness, and you report the forgiven amount on that year’s return.
PSLF forgiveness, Teacher Loan Forgiveness, and discharges for death or total and permanent disability are not taxable.9Taxpayer Advocate Service. What to Know About Student Loan Forgiveness and Your Taxes If you are insolvent at the time of forgiveness, meaning your total debts exceed the fair market value of everything you own, you can exclude some or all of the amount by filing IRS Form 982, up to the amount by which you’re insolvent.10Office of the Law Revision Counsel. 26 USC 108 – Income From Discharge of Indebtedness Some states also tax forgiven balances depending on how their tax code lines up with federal law.
Applying and Working Around the Backlog
Income-driven repayment applications go through studentaid.gov/idr and require a verified FSA ID.11Federal Student Aid. Income-Driven Repayment (IDR) Plan Request The form itself takes about 10 minutes if you have your family size, marital status, and income ready. You can consent to IRS data sharing so income fields fill automatically, or provide pay stubs if your income has dropped since your last tax filing.12Federal Student Aid. Income-Driven Repayment (IDR) Plan Request
Processing is slow. The SAVE litigation left a backlog, and the shift of borrowers into new plans has compounded it. If you can’t afford payments while waiting, contact your servicer and ask for a processing forbearance. That pauses your obligation and counts toward PSLF for up to 60 days. After 60 days, you move to a general forbearance if your application is still unprocessed. Apply sooner rather than later so interest has less time to grow before your new payment amount is calculated.
Older Federal Family Education Loan Program loans held by commercial lenders don’t qualify for IDR, PSLF, or federal deferments unless you first consolidate them into a Direct Consolidation Loan.13Federal Student Aid. What to Know About Federal Family Education Loan (FFEL) Program Loans Private student loans from banks or credit unions do not qualify for any federal relief at all.
If You Stop Paying
Federal loans default after 270 days without payment, roughly nine months. Once in default, the federal government can garnish up to 15% of your disposable income without a court order, and the Treasury Offset Program can intercept your federal and state tax refunds. The Department of Education resumed these collection activities in mid-2025. Default also wrecks your credit, cuts off eligibility for further federal aid, and can block professional license renewals in some fields.
Rehabilitation
You make nine payments over 10 consecutive months, so you can miss one and still qualify. The standard payment is 15% of your annual discretionary income divided by 12. If that’s too high, submit a Loan Rehabilitation Income and Expense form and the loan holder must calculate an alternative payment within 10 business days.14Federal Student Aid. Student Loan Rehabilitation for Borrowers in Default – FAQs Once you finish, the default is removed from your loan, collection stops, and you regain access to federal aid and every repayment plan above.
Direct Consolidation
You can consolidate defaulted loans into a new Direct Consolidation Loan, which removes the default immediately. You either make three consecutive on-time payments on the defaulted loan first, or agree to repay the new loan under an IDR plan. Consolidation is faster than rehabilitation, but the default notation stays on your credit report; rehabilitation is the only path that removes it.