What Is the Tiered Standard Repayment Plan?
The Tiered Standard Plan is a new fixed repayment option created alongside RAP. It is the default plan for new borrowers after July 1, 2026. Payments start lower and increase in tiers over the repayment period.
How the Tiered Standard Plan works
Unlike income-driven plans that base payments on your earnings, the Tiered Standard Plan sets a fixed payment schedule based on your loan balance. Payments start at a lower amount and increase at set intervals over the repayment term. The idea is that your income grows over time, so your payments grow with it.
The repayment term depends on your total balance. Smaller balances may have a 10-year term. Larger balances can have terms up to 25 or 30 years. The exact tier structure and payment amounts are calculated by your servicer based on your balance and interest rate.
Who gets the Tiered Standard Plan
The Tiered Standard Plan is only available to borrowers who take out a new federal student loan or consolidate after July 1, 2026. It is the default plan for this group. If you do not actively choose RAP, you are placed on the Tiered Standard Plan automatically. Borrowers who did not take any new loans after July 1 cannot access the Tiered Standard Plan but they also do not need it since they keep all their existing plan options.
Tiered Standard vs RAP
| Feature | Tiered Standard | RAP |
|---|---|---|
| Payment basis | Fixed schedule based on balance | 1-10% of AGI |
| Adjusts with income | No | Yes, annually |
| Interest subsidy | No | Yes, unpaid interest waived |
| Principal guarantee | No | Yes, $50/month minimum reduction |
| PSLF eligible | No | Yes |
| Forgiveness | None (you pay it off) | After 30 years |
| Default plan for new borrowers | Yes | Must actively choose |
Why most borrowers should choose RAP instead
The Tiered Standard Plan does not qualify for PSLF. If you work in public service, the Tiered Standard Plan is the wrong choice. Every month on it is a month that does not count toward the 120 payments needed for forgiveness.
The Tiered Standard Plan also has no interest subsidy. If your payments do not cover the monthly interest, your balance grows. RAP waives all unpaid interest, so your balance never increases.
The main scenario where the Tiered Standard Plan makes sense is if your income is high enough that RAP would charge more than the Tiered Standard payment, and you are not pursuing any form of forgiveness. In that case, the fixed schedule gives you a clear payoff date without the annual recertification hassle of RAP.
Frequently asked questions
What is the Tiered Standard Repayment Plan?
A new fixed repayment plan for federal student loans created by the One Big Beautiful Bill Act. Payments start low and increase in tiers over time. It is only available to borrowers who take out loans or consolidate after July 1, 2026.
Does the Tiered Standard Plan qualify for PSLF?
No. Only income-driven plans like RAP and IBR qualify for Public Service Loan Forgiveness. If you are pursuing PSLF you must choose RAP.
Is the Tiered Standard Plan the same as the regular Standard Plan?
No. The regular Standard Plan has equal monthly payments over 10 years. The Tiered Standard Plan has payments that start lower and increase in steps. The Tiered Standard is only available on the new repayment track after July 1, 2026.
Can I switch from the Tiered Standard Plan to RAP?
Yes. You can switch to RAP at any time by submitting an IDR application at studentaid.gov. You cannot switch to IBR, PAYE, or any old plan if you are on the new track.