(NPRM-Aligned)

Regulatory status note: This summary reflects the Department of Education’s January 2026 Notice of Proposed Rulemaking (NPRM) implementing the RISE provisions of the One Big Beautiful Bill Act. While the regulations are not yet final, the NPRM reflects the Department’s near-final regulatory position and supersedes prior discussion draft analyses. Sections not expressly revised below remain substantively unchanged.

§ 685.220 – Consolidation (Updated)

Under the NPRM, Direct Consolidation Loans made on or after July 1, 2026, remain subject to post‑2026 repayment plan eligibility rules (RAP or Tiered Standard). The NPRM clarifies the treatment of forgiveness credit earned prior to consolidation.

When a Direct Consolidation Loan repays loans with more than one period of qualifying payments toward IDR or RAP forgiveness, the consolidation loan receives credit equal to the weighted average of qualifying payments made, rounded up to the nearest whole month. This replaces earlier interpretations that consolidation would reset forgiveness credit to zero.

While consolidation preserves partial progress, weighted averaging may reduce the effective number of qualifying months when loans with fewer qualifying payments carry higher balances. Public Service Loan Forgiveness (PSLF) credit continuity remains governed by statute and is preserved.

Defaulted Borrowers and Rehabilitation (Updated)

The NPRM clarifies the consolidation pathway for defaulted borrowers. Through June 30, 2028, defaulted borrowers may consolidate loans to regain access to income‑driven repayment options described in statute. On or after July 1, 2028, statutory alignment limits available repayment plans for newly created consolidation loans, effectively funneling borrowers into the Repayment Assistance Plan (RAP) or Tiered Standard repayment.

These provisions refine, but do not overturn, the general post‑2026 repayment framework.

Forbearance Limits (Clarified)

For loans first disbursed on or after July 1, 2027, general borrower‑requested forbearance is limited to nine months within any 24‑month period. The NPRM clarifies that this limitation applies specifically to discretionary general forbearance and does not necessarily encompass all statutory or administrative categories.

Sections Unchanged Under the NPRM

– IBR mechanics and elimination of partial financial hardship
– RAP structure and forgiveness timeline
– Tiered Standard repayment terms
– Loan limits and graduate vs. professional study definitions
– Mixed‑cohort borrower treatment
– PSLF eligibility and structure