The Trump Administration has recently declared impending changes to federal student loan repayment. The Saving on a Valuable Education (SAVE) loans are expected to accrue interest from August 2025. Borrowers may switch to the Income-Based Repayment (IBR) plan to maintain debt forgiveness or wait for the new Repayment Assistance Plan (RAP), which rolls out in 2026.
The Department of Education is currently processing applications for other income-driven repayment (IDR) plans as the SAVE plan transitions out. These include the ICR and PAYE plans. However, takings are temporarily paused and expected to resume once payment records have been updated. This update will allow accurate counting of months not affected by the court injunction that prevented the SAVE plan.
The Big Beautiful Bill Act mandates substituting these plans with the newly proposed Repayment Assistance Plan (RAP) by July 1, 2028. Borrowers still enrolled at that time will automatically be transferred to the RAP unless their loan falls under Federal Family Education Loans (FFELs) or they have repaid via a parent PLUS loan. In this case, they will be directed to the IBR plan.
Parent PLUS borrowers must consolidate their loans before July 1, 2026, and enrol in an IDR plan by July 1, 2028 if they wish to remain eligible for the IBR plan after other options are phased out. If they fail to do so, they will lose their access to IDR plans.
Nevertheless, even if interest on your SAVE loan starts accruing from August 1, 2025, payments are compulsory only after the forbearance on the SAVE loan ends.
The Big Beautiful Bill has introduced the Repayment Assistance Plan (RAP). This plan's rollout is set for July 2026 and comes with a 30 years repayment term. RAP's monthly payments will depend on a borrower's adjusted gross income (AGI).
Your suitable plan (IBR or RAP) depends on your financial situation, preference, and whether you qualify for federal student loan forgiveness. Speak to a financial advisor to find the best fit for your situation.