Student loan repayment plans have changed. What borrowers need to know

Several of the U.S. Department of Education’s student loan repayment plans have recently changed in major ways — and more new rules are set to go into effect in the coming months.

Plans that used to conclude in student loan forgiveness no longer do, for example, while repayment timelines are getting longer for some borrowers. The Education Department has quietly rolled out some of these developments, with descriptions of the changes on FAQs on its website.

The revisions to the plans’ terms are a result of court actions over the last year or so, as well as the passage of President Donald Trump’s “big beautiful bill” earlier this summer.

Here’s what to know about the state of repayment plan options for those with federal student loans.

The Biden administration rolled out SAVE, or the Saving on a Valuable Education plan, in 2023, promising many borrowers that they’d see their monthly bills drop by half. Nearly 7.7 million people enrolled in SAVE, the Education Department recently said.

SAVE was a new income-driven repayment plan, also called an IDR.

Congress created the first IDR plans in the 1990s with the goal of making student loan borrowers’ bills more affordable. Historically, the plans cap people’s monthly payments at a share of their discretionary income and cancel any remaining debt after a certain period, typically 20 years or 25 years.

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But student loan borrowers never got the promised lower payments under SAVE. Just as many of the SAVE plan’s benefits were going into effect, Republican-led legal challenges blocked the program.

Unlike the Biden administration, Trump officials have not fought in the courts to preserve SAVE, and recently, Congress repealed the plan altogether.

As a result, the SAVE plan is now essentially defunct. Borrowers who enrolled in the plan were placed in a forbearance while the legal challenges played out. While you can remain in that payment pause for now, the Trump administration started charging interest if you do so as of Aug. 1.

“Staying in a forbearance is not wise, as the interest will continue to accrue, digging the borrower into a deeper hole,” said higher education expert Mark Kantrowitz.

The best option for many borrowers looking for another affordable repayment option now that SAVE is unavailable is the Income-Based Repayment plan, or IBR, experts said. IBR is also an income-driven repayment plan.

Under the terms of IBR, borrowers pay 10% of their discretionary income each month — and that share rises to 15% for certain borrowers with older loans.

Debt forgiveness is supposed to come after 20 years or 25 years, depending on when you took out your loans. Older loans are subject to the longer timeline.

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But there have been recent changes to IBR, too.

The Education Department said earlier this summer that it was pausing the loan discharge component on IBR while it responds to court decisions over SAVE. It said those rulings changed which periods count toward loan forgiveness on other plans, too, and that it is working to get updated eligible payment counts for IBR enrollees.

There’s another update to IBR: In the past, student loan borrowers needed to prove “partial financial hardship” to get into the plan, or income below a certain level. That requirement is now waived, the Education Department said.

However, Elaine Rubin, director of corporate communications at Edvisors, said some borrowers are not yet able to take advantage.

“While the partial financial hardship requirement for IBR was removed, borrowers are still being rejected due to their income,” Rubin. “We expect this to change, but it’s unclear when.”

The Income-Contingent Repayment plan, or ICR, no longer concludes in student loan forgiveness, the according to the Education Department website. There is also no debt erasure benefit anymore on PAYE, or the Pay as You Earn plan.

As a result, most experts now say to avoid these plans.

There’s another reason for that, too: The latest spending bill phases out ICR and PAYE as of July 1, 2028.

Starting on July 1, 2026, millions of borrowers will have access to a new option to pay down their debt, called the Repayment Assistance Plan, or RAP. RAP is an IDR plan, but it’s different from previous ones in several ways.

For one, it doesn’t shield a portion of a borrower’s income like other IDR plans do, but rather calculates their bill based on adjusted gross income. AGI is your total earnings before taxes, minus certain deductions.

The more you earn, the bigger your required payment. Under RAP, monthly payments will typically range from 1% to 10% of your earnings.

There will be a minimum monthly payment of $10 for all borrowers. (Under other IDR plans, certain low-income borrowers were entitled to a $0 monthly payment.)

RAP leads to student loan forgiveness after 30 years, compared with the typical 20-year or 25-year timeline on other IDR plans.

Current borrowers will maintain access to some existing repayment plans, including IBR. But those who borrow after July 1, 2026 will only have two options: RAP and a tweaked Standard Repayment Plan.

The current Standard Repayment Plan is fairly simple: Borrowers typically have their debt divided into fixed payments over 10 years. It’s often the fastest option for people to pay off their student debt, compared with IDR plans. 

That plan is still available and will remain available to borrowers who don’t take out any new loans after July 1, 2026.

But those who do will experience different terms.

The new Standard Repayment Plan will spread a borrower’s debt into fixed payments over one of four timeframes, depending on what they owe.

Those who’ve borrowed up to $24,999 will still have a 10-year repayment term. But those who owe between $25,000 and $49,999 will pay their debt back over 15 years; a balance ranging from $50,000 to $99,999 will be paid back over 20 years; and a debt over $100,000 will lead to a 25-year repayment term.