Public Service Student Loan Forgiveness Program Changes
The Department of Education rolls out new restrictions on the Public Service Loan Forgiveness program as of July 1, 2026, requiring people to enroll in the federal Repayment Assistance Plan to earn credit toward debt discharge. The law excludes the Tiered Standard Plan from the list of qualifying repayment options.
According to the federal government, Parent PLUS loans lose eligibility to income-driven student loan forgiveness under these regulations. Every qualifying payment must arrive on time and in full to count toward the 120-month requirement.
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Public Service Student Loan Forgiveness Program Changes
Congress passed the Working Families Tax Cuts Act to overhaul federal student aid. This legislation is meant to simplify repayment by replacing a dozen different plans with two primary choices. These changes affect people working in every branch of government service, including the Department of Defense. It also affects other non-military public service career fields.
People with loans disbursed before July 1, 2026, retain their current qualifying plans at press time. These borrowers may be allowed to continue using Income-Based Repayment or other qualifying income-driven plans.
These borrowers also have the option to join the new Repayment Assistance Plan, which, according to the Department of Education, requires a perfect payment history every month. Any payment received after the deadline fails the “on-time” test. The payment must cover the full monthly amount billed, and the Department of Education does not count partial payments or payments used to resolve a past delinquency.
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DOE Definition of “Full Payment”
The Department of Education defines a full payment as a total equal to or greater than the scheduled monthly amount. The system rejects any payment that does not meet this threshold. People must also ensure they work for a certified qualifying employer during the month of the payment. The Department of Education requires people to match every single payment to a period of verified public service. If a person works for a non-qualifying organization for even one month, that month’s payment will not count toward the 120-month total.
Temporary Expanded Public Service Loan Forgiveness
These rules also affect the Temporary Expanded Public Service Loan Forgiveness program, which helps people who made payments under consolidation Standard, Extended, or Graduated plans.
To qualify, a person must show that their most recent payment matches what they would have paid under a traditional income-driven plan. The Department of Education explicitly excludes the Repayment Assistance Plan from this comparison.
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Student Loans and Parent Borrowers
Parent borrowers may face the most severe changes. The Department of Education denies eligibility for the Repayment Assistance Plan on Direct PLUS Loans for parents. This exclusion affects Direct Consolidation Loans that include a parent PLUS loan.
Parents can no longer access income-driven forgiveness paths for this type of debt. Even if a parent previously qualified for forgiveness under older plans, the new law removes that eligibility after the July deadline. These borrowers are restricted to the Tiered Standard Plan. Since the Department of Education does not count payments under the Tiered Standard Plan toward forgiveness, parents lose their path to debt discharge.
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Student Loan Borrowers with Old and New Debt
Things are more complex for people who take out new loans on or after July 1, 2026, while still holding older debt. The law now requires a mandatory plan change once these new loans enter repayment.
The Department of Education requires these borrowers to move Direct Loans into either the Tiered Standard Plan or the Repayment Assistance Plan, and this rule applies to the entire loan balance, not just the new debt.
People must choose the Repayment Assistance Plan immediately to avoid losing progress, and the Tiered Standard Plan does not count toward forgiveness. A person who stays in the Tiered Standard Plan effectively pauses their progress toward the 120-payment goal.
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Student Loans After July 1, 2026
Borrowers whose loans all originate after July 1, 2026, cannot access any legacy repayment plans. Their only path to forgiveness lies within the Repayment Assistance Plan. The Department of Education removes all other income-driven options for this group.
Because the Tiered Standard Plan is ineligible for forgiveness, these borrowers must remain in the Repayment Assistance Plan for the full decade of service. Any mistake in plan selection or payment timing will delay their discharge date indefinitely.
>> Find scholarships for military, veterans, spouses, and dependents with our Scholarship and Grants Finder tool
About the author
Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
