By Asha Farrah, Co-Founder & CEO, Reducify™️
Editor’s Note: This is a guest post from 2025 Camelback Fellow Asha Farrah and Co-Founder of Reducify. The views and any product mentions are the author’s own. Key takeaways include a breakdown of the student loan changes, what borrowers should know, and why the Class of 2026 has a unique opportunity to prepare before repayment begins.
If you’ve been scrolling through social media or watching the news lately, you’ve probably seen headlines about the new Federal student loan rules as part of the Trump Administration’s One Big Beautiful Bill.
Maybe you’ve heard about the new Repayment Assistance Plan (RAP)? Maybe you’ve heard about the new Tiered Standard Repayment Plan or maybe you’ve simply been wondering: What does all of this actually mean for me? If that’s you, you’re not alone.
I’m going to break down the biggest updates, explain why they matter, and share what every borrower should do next.
So…What Is the One Big Beautiful Bill?
The One Big Beautiful Bill is a broad federal law that makes significant changes across several areas of government policy, including federal student loans. For borrowers, the law impacts repayment by introducing new repayment options, changing the availability of existing plans, and requiring borrowers to pay closer attention to their repayment strategy.
Why Should You Care?
These changes could affect your monthly payment, the repayment plan you choose, and how much you ultimately repay over the life of your loans.
Some borrowers now have new options. Others may discover that the repayment plan they expected to use is no longer available. Future borrowers may also have fewer repayment choices than borrowers who took out loans before July 1, 2026.
That’s why now is a great time to understand your options instead of waiting until your first payment arrives.
Here’s What’s New & What Borrowers Should Know
1. The Repayment Assistance Plan (RAP) is now available.
The Repayment Assistance Plan, or RAP, is a new income-based repayment option designed to make monthly payments more manageable for eligible borrowers.
RAP may be a good fit for borrowers who want monthly payments based on their income, especially recent graduates and those early on in their careers. Monthly payments are generally based on how much you earn, ranging from 1% to 10% of your income. Borrowers who remain eligible may also receive loan forgiveness after 30 years of qualifying payments.
However, the lowest monthly payment isn’t always the best financial decision. Before choosing any repayment plan, think about your income, career goals, family size, and how much you may repay over the life of your loans. The best repayment plan isn’t always the one with the lowest monthly payment, it’s the one that best supports your long term financial goals.
2. The New Tiered Standard Repayment Plan is available.
The new Tiered Standard Repayment Plan offers borrowers another way to repay their federal student loans. Unlike RAP, your monthly payment isn’t based on how much you earn. Instead, you’ll make fixed monthly payments over a repayment period that depends on how much you borrowed.
This plan is a good fit if you have a steady income, want predictable monthly payments, and prefer to pay your loans off over a set period rather than rely on long term forgiveness.
3. Some repayment plans are being phased out.
This is where things can get confusing. Borrowers who took out loans before July 1, 2026 may have different repayment options than borrowers taking out loans after that date.
Some existing repayment plans are being phased out for future borrowers, and certain borrowers currently enrolled in affected plans may have until July 1, 2028 to transition into a new eligible repayment option.
That means your options may depend on when you borrowed, what repayment plan you’re currently using, and the types of loans you have.
This is why checking your StudentAid.gov account matters.
4. Borrowers in default should take action.
If you’re in default, this isn’t the time to ignore your loans.
Default can have serious financial consequences, including damaged credit and future collection activity. The sooner you understand your options, the more choices you have to move forward.
Six Action Items I Would Consider If I Were a Borrower Right Now
1. Know who services your loans. Log into your Federal Student Aid account and confirm your loan servicer.
2. Compare your repayment options. Understand the differences between RAP, the Tiered Standard Repayment Plan, and any other plans available to you before making a decision.
3. If you’re enrolled in the SAVE Repayment Plan, watch for communications from your loan servicer. Once you receive your transition notice, you’ll generally have 90 days to choose a new repayment plan.
4. Update your contact information. Make sure your loan servicer has your current email address, mailing address, and phone number.
5. If you’re in default, don’t wait. Learn what options are available before collections create additional financial challenges.
6. Build a repayment strategy before repayment begins. Don’t wait until your first bill arrives. Planning ahead gives you more options, more confidence, and a stronger financial foundation.
What This Means for the Class of 2026
Here’s the part I’m most excited about for the Class of 2026. You have something millions of borrowers wish they could get back: time.
More specifically, you have a six-month grace period. Most people think of it as six months before repayment begins. I think of it differently.
It’s six months to prepare.
Use this time to understand your loans, compare repayment plans, build a budget, set financial goals, and create a strategy before your first payment is due. I know how easy it is to put student loans on the back burner after graduation. I did too.
I know firsthand how overwhelming this transition can feel. After graduating, I found myself navigating more than $130,000 in student loan debt with very little guidance. Paying it off taught me that successful repayment wasn’t simply about making payments. You need strategy, accountability, and mindset of preparedness.
That experience inspired my co-founder, Romy Pickron, CFP®, and me to build Reducify™️. Reducify helps graduating students use their six-month grace period to prepare for repayment through financial education, accountability partnerships, repayment planning, progress tracking, and personalized guidance.
Because the best repayment strategy starts long before your first payment is due.
Truthfully, the student loan landscape will continue to evolve. Repayment plans will change. New laws will be passed. But one thing won’t change.
The borrowers who are most successful aren’t necessarily the ones with the smallest loan balances. They’re the ones who understand their options, create a plan, and take action before repayment begins.
That’s why I believe your six-month grace period is one of the most valuable opportunities you have as a borrower. Use it. Ask questions. Learn your options. Build your strategy. Because the repayment plan you choose matters.
About the Author
Asha Farrah is the Co-Founder and CEO of Reducify™️, a gamified student loan readiness platform designed to help graduating college students use their six-month grace period to prepare for repayment through financial education, accountability, and personalized planning.
After paying off more than $130,000 in student loan debt herself, Asha built Reducify to help the next generation of graduates enter repayment with confidence instead of confusion. Reducify has been featured by AfroTech and Yahoo Finance, and in 2026 was named a CTIA Wireless Foundation Catalyst Finalist for its innovative approach to improving financial outcomes for recent college graduates. Asha was also selected to participate in the Founders on the Yard Silicon Valley Showcase, recognizing outstanding HBCU entrepreneurs building high-growth companies.
