The Trump administration is requiring borrowers to choose new repayment options after the Biden-era plan was ruled unconstitutionalMore than 7 million Americans will be forced to change their student loan repayment plan beginning on Wednesday, as the Save plan officially ends. The termination of the Biden-era initiative, which was launched
Sara Braun
More than 7 million Americans will be forced to change their student loan repayment plan beginning on Wednesday, as the Save plan officially ends. The termination of the Biden-era initiative, which was launched in 2023, coincides with a larger overhaul of the US student loan repayment system.
The seismic changes to the student debt landscape are the results of the Trump administration’s One Big Beautiful Bill Act passed in 2025 and a March 2026 federal court ruling that the Save plan, an income-driven repayment program created with the goal of cutting undergraduate loans in half, was unconstitutional.
Borrowers on the Save plan will now have 90 days to choose a different repayment plan. Those with loans issued before 1 July 2026 – and who do not plan to take out more loans – will retain access to multiple existing income-driven payment and fixed-income plans, including the income-based repayment (IBR), pay as you earn (Paye) and income contingent repayment (ICR) plans, which offer loan forgiveness between 20 to 25 years after payments. The latter two options, however, will also be dismantled by the summer of 2028.
The US Department of Education has said the upcoming overhaul simplifies the student debt system. In a statement earlier this year, Nicholas Kent, the under-secretary of education, said: “For years, borrowers have been caught in a confusing cycle of uncertainty, but the Trump administration’s policy is simple: if you take out a loan, you must pay it back.”
Financial experts and student borrower advocates have previously expressed major concerns about the changes.
“People are not feeling good,” Michele Zampini, associate vice-president of federal policy and advocacy at the Institute for College Access & Success (Ticas), said. “The two things that are top of mind are payment affordability, of course, and the ability to actually enroll and make payments without being embedded in servicing errors.”
Given the administrative limbo of the past year, Zampini does not anticipate a smooth transition. A September 2025 survey from Ticas and Data for Progress found that nearly half (48%) of borrowers reported long wait times to speak to or receive a response from a loan servicer when they reached out for assistance.
“Even people who have been actively trying to move out of Save [before July 1] have been hitting a lot of roadblocks,” she said. “So now we’re going to see at some point people are going to start getting these 90 day notices, but we don’t know how well prepared the department or the servicers are to implement those.”
New borrowers taking out loans on or after 1 July 2026 will only have access to the new repayment assistance plan (RAP) or the new tiered standard repayment plan. Under RAP, monthly payments are calculated based on a borrower’s adjusted gross income (AGI), rather than their discretionary income. If a borrower has an AGI above $10,000, monthly payments range from 1% to 10% of that amount. For those below that threshold, the monthly payment is $10. Loans are forgiven after 30 years. The tiered standard plan is a fixed-payment plan where payments last between 10 and 25 years depending on the initial balance and are at least $50 a month. Some borrowers may be automatically enrolled in this program if they are entering repayment and haven’t chosen another eligible plan.
“A lot of people made enrollment and borrowing decisions based on one repayment system, and are going to leave school into a less generous, more expensive repayment system,” said Zampini.
Students are already bracing for the impact of higher debt, and for some, it’s causing them to rethink their future plans. Ryan Coryea, a 21-year-old senior at the University of California, San Diego, previously told the Guardian she was planning to move back home to Texas after graduation because she won’t be able to make her student debt payments on top of rising housing and food costs. Though she’s considering getting a law or master’s degree in public policy, it may not be feasible under the new payment plans.
“For me as well as for a lot of my friends, it’s really making us reconsider how we’re going to pay for grad school, and also if we’re going to go at all,” she said.
