Key facts
- The Biden-era Save student loan plan has officially ended.
- Over 7 million US borrowers must find a new repayment plan within 90 days.
- The changes are driven by the Trump administration's One Big Beautiful Bill Act and a court ruling.
- Older income-driven repayment plans will be phased out by summer 2028.
- New repayment plans, RAP and tiered standard, will be available for new borrowers from July 1, 2026.
- Concerns exist regarding payment affordability and potential servicing errors for borrowers.
The Biden-era Save student loan repayment plan has officially concluded, impacting over 7 million American borrowers who must now select a new repayment strategy within a 90-day window. This significant shift in the student debt landscape is attributed to the Trump administration's 'One Big Beautiful Bill Act' passed in 2025 and a federal court ruling in March 2026 that deemed the Save plan unconstitutional.
The Save plan, designed to reduce undergraduate loan payments by half, is being replaced by new repayment options. Borrowers with loans issued before July 1, 2026, who do not intend to take out further loans, will still have access to existing income-driven repayment (IDR) plans such as income-based repayment (IBR), pay as you earn (Paye), and income contingent repayment (ICR). However, the Paye and ICR plans are slated for dismantling by the summer of 2028.
According to the US Department of Education, the overhaul aims to simplify the student debt system. Nicholas Kent, under-secretary of education, stated that the Trump administration's policy is straightforward: "if you take out a loan, you must pay it back." This contrasts with the previous system's complexity.
Financial experts and student advocates have voiced significant concerns. Michele Zampini, associate vice-president at the Institute for College Access & Success (Ticas), noted that borrowers are worried about payment affordability and potential servicing errors. A September 2025 survey by Ticas and Data for Progress revealed that nearly half of borrowers experienced long wait times when seeking assistance from loan servicers, suggesting a challenging transition ahead.
For new borrowers taking out loans on or after July 1, 2026, two new plans will be available: the repayment assistance plan (RAP) and the new tiered standard repayment plan. Under RAP, monthly payments are based on adjusted gross income (AGI) rather than discretionary income, ranging from 1% to 10% for AGIs above $10,000, with a flat $10 payment for those below this threshold. Loans under RAP are forgiven after 30 years. The tiered standard plan offers fixed payments over 10 to 25 years, depending on the initial loan balance, with a minimum of $50 per month. Some borrowers may be automatically enrolled in this plan if they do not select another option upon entering repayment.
Zampini highlighted that students made borrowing and enrollment decisions based on the previous system and will now face a less generous and potentially more expensive repayment structure. This is already causing some students, like 21-year-old Ryan Coryea, to reconsider their post-graduation plans, including the feasibility of pursuing further education due to the anticipated debt burden.