More than 7 million Americans on the Save student loan repayment plan will be forced to choose a new option starting Wednesday, as the Biden-era programme officially ends following a federal court ruling that deemed it unconstitutional. The termination, part of broader changes under the Trump administration's One Big Beautiful Bill Act passed in 2025, gives borrowers 90 days to select an alternative plan.
Those with loans issued before 1 July 2026 who do not plan to take out further loans can still access existing income-driven repayment plans such as income-based repayment (IBR), pay as you earn, and income contingent repayment (ICR), which offer forgiveness after 20 to 25 years. However, the latter two options will be phased out by summer 2028.
The US Department of Education says the overhaul simplifies the system. Under-Secretary of Education Nicholas Kent stated: '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 advocates have expressed concerns about the transition.
Michele Zampini, associate vice-president of federal policy and advocacy at the Institute for College Access & Success (Ticas), said: 'People are not feeling good. The two things that are top of mind are payment affordability and the ability to actually enroll and make payments without being embedded in servicing errors.' A September 2025 survey found that 48% of borrowers reported long wait times when contacting loan servicers.
New borrowers taking out loans on or after 1 July 2026 will only have access to the new repayment assistance plan (RAP) or the tiered standard repayment plan. Under RAP, monthly payments are based on adjusted gross income (AGI), with rates from 1% to 10% for those earning above $10,000, and a $10 minimum for those below. Loans are forgiven after 30 years. The tiered standard plan offers fixed payments of at least $50 per month for 10 to 25 years.
Students are already reconsidering their plans. Ryan Coryea, a 21-year-old senior at the University of California, San Diego, said the changes are making her rethink graduate school: '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.'
