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Some of the U.S. Department of Education’s student loan repayment programs have recently changed in a major way – more new rules will take effect in the coming months.
For example, plans that previously concluded in student loan forgiveness no longer do so, for example, for some borrowers, repayment schedules are getting longer and longer. The Education Department quietly rolled out some of these developments and described changes to FAQs on its website.
The amendment to the terms of the plan was the result of a court lawsuit around last year and the passage of President Donald Trump's “Big Beauty Act.”
This is an understanding of the repayment plan choices for those with federal student loans.
save
The Biden administration has launched savings in 2023, or saved on a valuable education program, promising that many borrowers see their monthly bills drop by half. The education department recently said nearly 7.7 million people participated in the rescue.
Save is a new income-driven repayment plan, also known as IDR.
Congress developed the first IDR program in the 1990s to make student loan borrowers’ bills more affordable. Historically, the program limits people’s monthly payments with a portion of its disposable income and cancels remaining debts after a specific period, usually 20 or 25 years.
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However, student loan borrowers never get the lower payments promised. Just as many of the benefits of the rescue plan are taking effect, Republican-led legal challenges prevented the plan.
Unlike the Biden administration, Trump officials have not fought in court to secure storage, and recently Congress has completely abolished the plan.
As a result, the save plan has now been essentially deactivated. Borrowers participating in the program were tolerated in the legal challenges. While you can stop at that payment now, if you start collecting interest from August 1st, the Trump administration starts charging.
“It is not wise to stay tolerant because benefits will continue to arise, digging borrowers into a deeper hole,” said Mark Kantrowitz, a higher education expert.
ibr
Experts say that for many borrowers seeking another affordable repayment option, savings are unavailable is an income-based repayment plan or IBR. IBR is also an income-driven repayment plan.
Under the terms of the IBR, borrowers pay 10% of their disposable income per month, while the share of some borrowers with older loans rises to 15%.
Debt forgiveness should be after 20 or 25 years, depending on when you take out a loan. Older loans need to be followed for a longer timetable.
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But ibr has also changed recently.
The education department said earlier this summer that it was suspending the loan release portion of the IBR while also making a preserved ruling on the court's ruling. It said the rulings also changed the periods of loan forgiveness for other programs, and it is working to get the latest eligible payment counts for IBR participants.
There is another update to the IBR: In the past, student loan borrowers had to prove “partial financial difficulties” to enter the program, or earning below a certain level. The education department said the request has now been abandoned.
However, Elaine Rubin, director of communications at Edvisors, said some borrowers are not able to exploit it yet.
“Although some of the financial hardship requirements were deprived of Yicoin, the borrower was still denied due to income,” Rubin said. “We hope this will change, but it's not clear when it will be.”
ICR and PAYE
According to the Ministry of Education website. PAYE no longer has debt removal benefits, or the salary you earn when you plan.
As a result, most experts now say avoiding these plans.
This is another reason: as of July 1, 2028, the latest spending bills are gradually disappearing.
rap
Starting July 1, 2026, millions of borrowers will be able to use a new option to pay off their debts, called the repayment assistance program or rap. RAP is an IDR plan, but it is different from previous plans.
First, it does not mask a portion of the borrower’s income like other IDR plans, but rather calculates its bill based on the adjusted total income. AGI is your total income before tax, minus some deductions.
The more you make, the greater the payment you need. Under RAP, monthly payments are usually between 1% and 10% of your income.
All borrowers have the lowest monthly payment. (Some low-income borrowers are entitled to pay $0 per month under other IDR plans.)
Rap leads to student loan forgiveness compared to the typical 20- or 25-year term of other IDR programs.
Current borrowers will maintain access to some existing repayment plans, including IBR. However, those who borrowed after July 1, 2026 have only two options: rap and an adjusted standard repayment plan.
Standard repayment plan
The current standard repayment plan is fairly simple: Borrowers usually divide the debt into fixed payments for 10 years. This is usually the fastest option for people to pay off their student debt compared to IDR programs.
The program is still available and will be reserved for borrowers who do not bring any new loans after July 1, 2026.
But those who do so will experience different terms.
The new standard repayment plan will allocate borrowers’ debt to fixed payments based on their owed payments.
Those who borrow $24,999 will still have a 10-year repayment period. But those who owe between $25,000 and $49,999 will pay off their debts within 15 years; balances range from $50,000 to $99,999 and will pay them off within 20 years; debts above $100,000 will result in a 25-year repayment period.