Going Back to School After July 1, 2026? One New Loan Could Move All Your Debt to RAP

Taking out a new loan after July 2026 is now quite dangerous if you have loans from before July 2026. 

Why? 

If you take out a new student loan after July 2026 for any reason, even if it's a tiny loan, it could force you to move all of your student loans into the Repayment Assistance Plan. 

That might not sound too bad, but the Repayment Assistance Plan (RAP) is 10% of income for most borrowers with six-figure incomes, and it’s a 30-year repayment schedule until forgiveness if you’re not going for Public Service Loan Forgiveness (PSLF).

Contrast that to the 20-year repayment schedule for the new Income-Based Repayment (IBR) plan. 

Who should be worried about taking out new student loans after July 2026?

Borrowers with loans before July 2026 who had no debt before July 2014 and are not pursuing PSLF have the most to lose under this new rule, which could force them into RAP if they borrow after July 2026.

If you are a borrower with a significant amount of student loans from a professional degree program and you're not pursuing PSLF, that means if you take out one new loan after July 2026, you could get your entire debt shuffled to RAP, which would cost you potentially an extra 10 years of repayment. 

Pretend you’re a dentist. Your earnings in years 21 to 30 of your career could be $300,000 or more. And your payments on RAP could be between $2,300 and $2,450 per month, depending on family size.

If you take out student loans after July 2026, you would end up paying hundreds of thousands of dollars more than under the new version of the IBR plan.

Clearly, if you have a lot of student debt and work in the private sector, the only reason to take out federal student loans after July 2026 is if you have no other option to be able to complete your degree.

Who should not worry about taking out loans post-July 2026?

If you’re planning to pursue the PSLF program, such as if you’re a resident physician, then taking out unlimited loans the next few years should not worry you, as RAP counts for PSLF and you can still receive unlimited tax-free forgiveness.

Separately, if you’re close to being done with your professional degree program at an expensive private school, you’ll have a very high debt-to-income ratio, and you need to borrow six figures more for your degree; it might be that private loans are not a viable option anyway.

Even though you might be paying for 30 years on RAP instead of 20 years on IBR, it’s much better to be paying for 30 years on RAP with a higher professional income than not getting a degree at all.

So PSLF borrowers, as well as those with extremely high debt loads in the private sector, should feel comfortable taking advantage of the grandfathering rules about unlimited Grad PLUS Loans that fully phase out by 2029.

Who will be forced into the private student loan market

If you’re a new borrower as of July 2026, or you’ve already completed your expected time to credential (i.e., you're starting your fifth year at a four-year dental program), then you would be subject to the new professional school borrowing limits of $200,000 a year.

In that case, your only option to fund your degree completion would be private loans like the ones available on our marketplace of lenders.

Your financial aid office will tell you if you’ve exhausted your federal loans and if private loans have become your only option.

Who can take out new student loans after July 2026

Here’s the list of folks who can access federal loans for grad or professional school after this new July 2026 date, when so many of the rules changed:

• Borrowers who are grandfathered in who had at least one loan for their current program before July 2026
• Borrowers who need less than their program maximum ($20,500 for grad school and $50,000 for professional school per year) who are also below their lifetime loan limit

The federal student loan pool of money is tighter than it’s been in decades. While some students will get all the federal loans they need to complete their degree, many will not.

If you need a custom plan for financing your education or want to self-provision and shop around, we’ve got you covered.

You don’t want to be surprised and discover that one small loan you took out cost you an extra 10 years of repayment unless you absolutely have to.