Federal Student Aid

A revised paper income-driven repayment application with an option to enroll in the Repayment Assistance Plan became available. The Student Loan Borrower Assistance Project reported that the form was released on October 1, 2026.

Some former SAVE borrowers received notices directing them to select a repayment plan within 30 days. The notices were sent after initial SAVE-transition windows for borrowers initially notified around July 1 had expired.

Federal Student Aid told borrowers that time spent in the SAVE forbearance does not earn credit toward Public Service Loan Forgiveness, and that months already credited before entering it are not removed. Borrowers who reach 120 months of qualifying employment can buy back certain ineligible months, the SAVE forbearance among them.

Federal Student Aid said loan servicers will deny pending SAVE Plan applications. Borrowers who do not choose another plan after the denial and final notice process will be returned to the repayment plan they held before applying for SAVE.

Federal Student Aid's fiscal 2023 briefing put about 1,800 institutions at or above a 25 percent nonpayment rate, below the roughly 2,100 the department had reported eight days earlier from updated data.

Federal Student Aid published its official national cohort default rate briefing for fiscal 2023, with the rates attached to the announcement.

The U.S. Department of Education extended the deadline to enroll in auto pay for the temporary 1-percentage-point interest-rate reduction to December 31, 2026. Borrowers enrolled by that date, or already enrolled, will receive the reduction through June 30, 2028.

Federal Student Aid distributed FY 2023 official cohort default rate notification packages to eligible domestic and foreign schools. Federal Student Aid said the school-specific packages were scheduled for public release on September 30, 2026, with appeals beginning October 6.

Federal Student Aid announced that servicing of federally held Perkins Loans would transition from ECSI Federal Perkins Loan Servicer to GCR Servicing. The agency said the transition would occur over the following months.

Federal Student Aid said enrollment reporting for the Repayment Assistance Plan would be available in the next quarterly report. The agency said RAP was introduced in July 2026, after the quarter covered by the data cycle ended.

Federal Student Aid reported that approximately 2,100 institutions had nonpayment rates at or above 25%. The agency said this was an increase of approximately 100 institutions from its May 2026 report.

Federal Student Aid reported that the cumulative number of recipients in default increased by about 400,000 to more than 9.3 million. NASFAA separately reported the same increase from the updated Federal Student Aid data.

Inside Higher Ed reported that colleges used different interpretations of the expected-time-to-credential exception for continuing students. Texas Christian University used completed credit hours in one Parent PLUS determination, while Loyola Marymount University said it would use years enrolled pending written Federal Student Aid guidance.

NASFAA advised financial-aid administrators to seek legal counsel over uncertainty in Education Department guidance on the expected-time-to-credential exception. NASFAA said the August 12 webinar used completed credit hours after earlier written guidance directed schools to use time enrolled, while the Department said its clarification was not a policy change.

Federal Student Aid instructed schools to calculate continuing borrowers’ expected time to credential using completed credit hours rather than time enrolled. The calculation determines how long grandfathered borrowers may retain access to Grad PLUS after new borrowing closed on July 1, 2026.

The U.S. Government Accountability Office reported that servicers faced implementation challenges because Education did not consistently provide clear advance instructions for program changes. GAO recommended criteria for early coordination with servicers, and the U.S. Department of Education disagreed with that recommendation.

The U.S. Department of Education began sending 90-day notices to SAVE borrowers on July 1, 2026. The notices were sent in waves, and the earliest required move to a new plan was September 29, 2026.

The law's main provisions took effect. RAP sets payments at 1 to 10 percent of income minus $50 per dependent with a $10 floor, waives unpaid monthly interest for on-time payers and adds up to $50 a month toward principal, with any balance discharged after 360 payments. The Tiered Standard plan runs 10 to 25 years by balance. New graduate borrowers face the $20,500 and $50,000 annual caps, and servicers began the 90-day exit notices to SAVE enrollees. Under Secretary Nicholas Kent said nearly 46,000 borrowers applied for RAP on day one, after a weekend-long StudentAid.gov outage.

Judge Myong J. Joun of the U.S. District Court for the District of Massachusetts granted summary judgment to the plaintiffs and vacated the Public Service Loan Forgiveness employer-eligibility rule on June 30, the day before its July 1 effective date. On July 13 Federal Student Aid said it was removing the employer attestation it had just added to the PSLF form to comply with the order.

In consolidated suits led by the American Association of Nurse Practitioners, Judge Beryl Howell of the D.C. district court preliminarily stayed the part of the RISE rule that had limited the $50,000-a-year professional tier to 11 degrees, writing that 'Congress could not have been clearer'. Federal Student Aid responded with an interim list of more than 20 programs, adding nursing, physician associate and speech-language pathology degrees, while saying it would keep defending its definition.

Federal Student Aid released portfolio reports containing data through March 31, 2026. The reports showed approximately nine million federally managed loan recipients in default, 8.4 million recipients in forbearance, and approximately 13 million borrowers in IDR plans.

Borrower-assistance groups told CNBC that the department's online income-driven repayment application was showing wrong plan eligibility and monthly payment estimates, servicers were sending erroneous delinquency notices to borrowers still in forbearance, and some borrowers were being told to consolidate unnecessarily, as nearly seven million SAVE enrollees prepared to change plans with an agency that had lost close to half its staff.

After the court entered final judgment, the department began sending guidance to every SAVE enrollee. From July 1 servicers would issue notices giving borrowers 90 days to choose a legal plan, including the new Repayment Assistance Plan; anyone who did not act would be placed in the Standard or Tiered Standard plan, typically with higher payments than an income-driven option.

Federal Student Aid released updated portfolio reports containing data through December 31, 2025. The reports showed 7.7 million federally held loan recipients in default, more than 6.5 million borrowers in SAVE forbearance, and nearly 12.9 million borrowers enrolled in IDR plans.

President Trump signed the reconciliation law (P.L. 119-21, later rebranded by the administration as the Working Families Tax Cuts Act). For student loans it created the Repayment Assistance Plan and a Tiered Standard plan, ended Grad PLUS for new borrowers and capped graduate ($20,500 a year, $100,000 total), professional ($50,000, $200,000) and Parent PLUS borrowing from July 1, 2026, sunset SAVE, PAYE and ICR by July 1, 2028, and allowed a second loan rehabilitation. Some provisions, such as dropping IBR's partial-financial-hardship test, took effect immediately.

Secretary Linda McMahon announced that Federal Student Aid would resume collecting on the defaulted portfolio on May 5, 2025, through the Treasury Offset Program and later wage garnishment. The department said 42.7 million borrowers owed more than $1.6 trillion, more than five million were in default, four million more were in late-stage delinquency, and only 38 percent of borrowers were current on their loans.

Federal Student Aid put a rewritten income-driven repayment and consolidation application back online about five weeks after taking it down to comply with the Eighth Circuit injunction. Borrowers could again apply for Income-Based Repayment, Pay As You Earn and Income-Contingent Repayment, while SAVE stayed closed and the backlog of pending applications, then near two million, kept growing.