January 2026 Student Loan Update for Teachers: Taxes, PSLF, and Parent PLUS Deadlines You Can’t Ignore
- David Gourley
- Jan 20
- 4 min read
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January is always a great month to plan for the year, but January 2026 carries more weight than usual for student loans. Major repayment changes are underway, deadlines are approaching, and some decisions, especially around both taxes and Parent PLUS loans, can’t be undone if they’re missed.
If you’re pursuing Public Service Loan Forgiveness (PSLF) or income-driven forgiveness, this is not the year to be passive. The goal of this update is to help you focus on what actually matters right now and avoid costly mistakes.
How You File Your 2025 Taxes Could Dramatically Change Your Student Loan Payment
For married teachers and public servants, the way you file your 2025 tax return can have an outsized impact on your student loan payment. In many cases, it can mean the difference between an affordable payment and one that feels completely unmanageable.
Income-driven repayment plans calculate your monthly payment using your Adjusted Gross Income (AGI). When you’re married, that calculation can change significantly depending on how you file your taxes.
Filing taxes separately can:
Reduce the income used to calculate your student loan payment
Lower monthly payments for income-driven repayment plans
Decrease the total amount paid before forgiveness
However, filing separately is not automatically better. It often comes with tradeoffs, including:
Higher overall tax liability
Loss of certain tax credits and deductions
A worse net outcome once taxes and loans are considered together
This is why it’s so important not to treat tax filing as a standalone decision. Before you file your 2025 return, make sure you talk with someone qualified who can evaluate both the tax consequences and the student loan impact. Once your return is filed, the student loan consequences are often locked in for the entire year.
SAVE Is Ending, and Repayment Plan Changes Are Coming
The SAVE repayment plan is officially coming to an end, and borrowers should expect to transition to another income-driven repayment plan in the future. While exact timelines and mechanics are still evolving, the direction is clear: SAVE is not a permanent solution.
What matters most right now is understanding that a change is coming. Waiting until a forced transition happens can result in higher payments, administrative delays, or even lost qualifying months toward PSLF.
At a high level, borrowers should expect:
A required switch away from SAVE
A need to select a different IDR plan
Increased importance of staying proactive rather than reactive
The goal here is to get prepared for the change.
Public Service Loan Forgiveness Is Still Working, and It’s Working Fast
Despite ongoing changes to repayment plans, Public Service Loan Forgiveness remains fully intact. In fact, it’s functioning better than it has in years.
Processing times have improved, communication has stabilized, and borrowers who meet the requirements are seeing real results. Just yesterday, one of my clients received full forgiveness, a reminder that PSLF is not theoretical.
For teachers and public servants who are:
Employed by a qualifying employer
On an eligible repayment plan
Certifying employment correctly
PSLF continues to be one of the most powerful benefits available.
PSLF Buyback Exists, but It Is Slow and Unpredictable
The PSLF buyback program was designed to allow borrowers to retroactively purchase missing qualifying months. While the concept is helpful, the execution has been extremely challenging.
There are reportedly around 90,000 buyback applications, and only a very small team is processing them. As a result, borrowers should expect long timelines, limited updates, and unpredictable outcomes.
Buyback can still be useful in the right circumstances, but it should be approached as:
A backup option
Not something to rely on for timely forgiveness
A process that requires patience and realistic expectations
RAP Is Expected in July 2026, but It Should Not Delay Planning
The new RAP (Repayment Assistance Plan) is expected to become available in July 2026. While it may eventually simplify repayment for many borrowers, it is not a reason to delay current action.
It’s especially important to understand that:
Parent PLUS borrowers will not be eligible for RAP
Details are still evolving
Waiting for RAP can create unnecessary risk for PSLF borrowers
RAP may be part of a future strategy, but it should not replace planning today.
Parent PLUS Borrowers Must Act Now to Preserve Forgiveness Options
If you have Parent PLUS loans and are pursuing any form of forgiveness, this section is critical.
To remain eligible for PSLF or income-driven forgiveness, Parent PLUS borrowers must:
Consolidate their Parent PLUS loans into a Direct Consolidation Loan
Enroll in the Income-Contingent Repayment (ICR) plan
Ensure both the consolidation and repayment plan application are processed by July 1
These deadlines matter. Parent PLUS loans have limited flexibility, are excluded from RAP, and once forgiveness pathways close, they often do so permanently.
If you’re unsure whether your loans are properly set up, now is the time to confirm.
Final Thoughts: 2026 Is a Year for Intentional Planning
Student loan planning in 2026 isn’t about chasing headlines or waiting for perfect clarity. It’s about understanding how today’s decisions affect tomorrow’s outcomes, especially when taxes, repayment plans, and forgiveness timelines overlap.
For teachers and public servants, intentional planning can mean the difference between paying far more than necessary and reaching forgiveness as efficiently as possible. And when the rules get complicated, that’s often the clearest signal that thoughtful guidance matters most.
When you are ready, let’s schedule a student loan consultation to review your situation before anything is missed or mistakes are made.
David Gourley is the Founder and lead Financial Planner at K-12 Planning, an independent financial planning firm specializing in finance for teachers. He served for eight years as a high school mathematics teacher before transitioning into the financial services industry. He started K-12 Planning in 2024, and his passion for serving as a fiduciary for teachers and a student loan planning expert runs deep, as his wife and several other family members have served as educators for years.
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