Student Loan Servicer Reveals 2026’s Must-Know Strategies for Borrowers

Student debt gets a tech makeover—servicers push automation while borrowers hunt for exits.

The Digital Pivot

Loan servicers are rolling out AI-driven repayment dashboards and blockchain-based verification systems. One major platform processed over 2 million automated income-driven recertifications last quarter alone—cutting human error and wait times. These systems bypass traditional paperwork, syncing directly with IRS data streams.

Refinancing Roulette

Private refinancing offers flood inboxes with rates dangling 1.5% below federal options. But here’s the cynical finance jab: those teaser rates often assume you’ll trade away federal protections like forgiveness pathways—a swap that looks clever until the economy hiccups. Always read the blockchain-smart fine print.

The Forgiveness Frontier

Public Service Loan Forgiveness approvals hit a record high this year, but the backlog still stretches months. Automated tracking tools now let borrowers monitor qualifying payments in real-time—no more waiting for annual updates from overwhelmed servicers.

Debt as a Digital Asset

Some fintechs are tokenizing student loan portfolios, allowing fractional investment—turning your debt into someone else’s speculative asset. It’s innovative, unsettling, and utterly 2026.

Servicers preach automation while borrowers navigate a maze of old rules and new tech. The smart money? Use their tools, but trust your own math.

KEY TAKEAWAYS

• College students who take out federal loans will have two new repayment options, both of which were created under the “One Big Beautiful Bill.”
• The Saving for a Valuable Education program is expected to end in 2026, but borrowers may want to exit the repayment plan sooner.

Several changes to repayment plans are expected to take effect in the new year, and some could benefit borrowers—as long as they understand the details.

First, the "One Big Beautiful Bill" will completely overhaul the student loan repayment system, starting next year for both borrowers currently in repayment and those still in school.

Additionally, the Department of Education announced that the Saving for a Valuable Education plan will be shut down as part of a lawsuit settlement. Although the decision is still pending a judge's approval, it is widely expected that the SAVE plan will not be an option for borrowers in 2026. It also means the millions of borrowers enrolled in the plan who have been under forbearance for more than a year will need to find a new repayment plan.

Investopedia spoke with Scott Buchanan, executive director of the Student Loan Servicing Alliance, about repayment plans for 2026 and what borrowers should watch for. This interview has been edited for brevity and clarity.

Why This Matters

More than 7.7 million of these borrowers are currently on the SAVE plan and have not had a payment due for more than a year. However, in 2026, their repayment plan may be upended, and they will need to explore alternative repayment options.

The big thing is that, effective July 1, 2026, there are going to be two repayment plans that are available for new borrowers. So, historically, there has been a wide selection of different plans, some of which are more confusing than others. But going forward, borrowers who take on new loans will have the Repayment Assistance Plan as an option, which is an income-driven repayment plan. So your monthly payment amount will be based on your income level for those loans.

The other option that will be available is what folks are referring to as the new tiered Standard Plan. And that plan, while not based upon your income, is one that is going to be based upon the size of the loan. Larger loans will have a longer repayment term, which means a lower monthly payment as you go through repaying that loan.

I think everyone needs to look [if RAP is better for them], because it really varies based on your loan balance and your income. But also, people need to think about what their future income is likely to be under the RAP, as the amount that you will pay scales up as a percentage based on your income.

The Department of Education will be making available online calculators where you can go in and enter either your current income or what you think you might be making in a few years, in order to compare which plan is going to offer you the lowest monthly payments.

However, I think it's important for borrowers to consider that it's not just the lowest monthly payment that should be their primary concern. It's the total amount that they're going to pay for that loan.

The RAP plan does have an interest subsidy and a principal balance reduction component, which is kind of complicated, but that's where these online calculators that the Department will be making available will help people make that choice. Those will be available [probably by April or May] so people can go online, enter their individual, specific financial information, loan balances, and calculate which one is going to be the right one for them.

RELATED EDUCATION

The timing of the end of the SAVE plan is still up in the air because the courts are still in active litigation on this matter. I think, regardless [of when it will] no longer be available, borrowers should keep in mind that right now, interest is accruing if they're enrolled in the SAVE plan and in that forbearance.

While this litigation is being resolved, their loans are growing in size, and so sitting still and doing nothing is probably not the best outcome. While we don't know the timing, we know the end result, which is: SAVE will not be an option.

I think borrowers really ought to take a look at what other income-driven repayment plans might best fit them.

For most borrowers, obviously, IBR [Income-Based Repayment], since that's an existing plan, and after July 1, perhaps RAP will be an option for them. But getting probably moving into IBR is the best thing, because, as I mentioned, No. 1, interest is accruing. If you're in that same forbearance, so you're not making progress. In fact, you're making reverse progress, which means the loan is getting larger. And No. 2, while you're in that period of forbearance, none of that time counts toward potential loan forgiveness under IBR or in the future RAP.

If you're struggling financially, you have a real financial problem and can't afford to make any payment today, staying that way might be the right option for you. But if you can and have the ability to make a payment, you probably need to MOVE into IBR and probably do so sooner rather than later.