Federal Borrowers Face New Forgiveness Steps After July 1 Repayment Overhaul
Updated
Updated · CBS New York · Aug 19
Federal Borrowers Face New Forgiveness Steps After July 1 Repayment Overhaul
3 articles · Updated · CBS New York · Aug 19
Summary
July 1 rule changes reshaped how federal borrowers should pursue loan forgiveness in 2026, making loan disbursement dates and current repayment plans central to eligibility.
Borrowers whose loans were all disbursed on or after July 1, 2026 generally have the new Repayment Assistance Plan as their only income-driven option, while SAVE is gone and PAYE and ICR are set to be retired by July 1, 2028.
120 qualifying monthly payments still unlock Public Service Loan Forgiveness for eligible Direct Loan borrowers, but applicants must first verify loan type, employer status and repayment-plan eligibility, then file the correct PSLF or IDR forms through StudentAid.gov tools.
Refinancing can undercut that path because moving federal loans to a private lender strips access to income-driven repayment, PSLF, Teacher Loan Forgiveness and other federal discharge protections.
The guidance follows Congress's broader student-loan overhaul, which is already pushing many borrowers off older repayment plans and forcing a reassessment of forgiveness strategies.