As the Trump administration overhauls the federal student loan repayment system, borrowers may soon find it difficult to keep up with their monthly payments, consumer advocates said.
The SAVE, or Saving on a Valuable Education, plan, touted by the Biden administration as the most affordable repayment program ever, is now defunct. President Donald Trump’s “big beautiful bill” phases out several other income-driven repayment plans, which were aimed at making payments manageable for student loan holders.
“In many instances, borrowers will be left with no affordable options, increasing the risk of default,” said Nancy Nierman, assistant director of the Education Debt Consumer Assistance Program in New York City.
Here are the biggest changes to federal student loan repayment under Trump, so far.
SAVE plan is defunct
The Biden administration rolled out the SAVE plan in summer 2023. The repayment plan’s terms were the most generous to date; under the program’s rules, many borrowers’ monthly bills would have dropped by as much as half.
But just as many of the 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Unlike the Biden administration, Trump officials have not fought in the courts to preserve SAVE, and recently Congress repealed the plan altogether.
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The Education Department announced on July 9 that the interest-free payment pause that the Biden administration had enrolled SAVE borrowers in during the legal challenges will expire on Aug.1.
Ellen Keast, deputy press secretary at the Education Department, said the agency was obligated to end the interest-free pause under recent court orders.
Secretary of Education Linda McMahon said in a statement that borrowers in SAVE should “quickly transition to a legally compliant repayment plan — such as the Income-Based Repayment Plan.”
But under the other existing repayment plans, borrowers will see their bills “jump up unexpectedly,” said Malissa Giles, a consumer bankruptcy attorney in Virginia.
“I cannot imagine the stress that will be put on folks,” she said.
Higher education expert Mark Kantrowitz said, “We can expect payments under IBR to be more than double payments under SAVE.”
Repayment plan options have dwindled
Under Trump’s “big beautiful bill,” borrowers who take out federal student loans after July 1, 2026, will have just two repayment plans to choose from, compared with roughly a dozen options now. Existing borrowers will maintain access to other repayment options.
New student loan borrowers could enroll in either a standard repayment plan with fixed payments or a single income-based repayment plan: the “Repayment Assistance Plan,” or RAP.
Preston Cooper, a senior fellow at the conservative policy research organization American Enterprise Institute, wrote in a recent blog post that “scheduled monthly payments under RAP are significantly higher than those under the Biden administration’s SAVE plan for borrowers of the same income levels.”
Cooper provided an example of a borrower who earns $80,000 per year: their monthly bill under RAP will be $533, whereas it would be $179 with SAVE, he wrote.
“The student borrowers for whom the SAVE plan was the only affordable option will be severely impacted by these changes,” said Nierman, of the Education Debt Consumer Assistance Program.
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