Sweeping changes to the federal student loan system are on the horizon—and some are already beginning. Following the passage of President Donald Trump’s latest spending bill, the Department of Education has begun implementing new policies that will reshape how millions of Americans repay their loans.
New Repayment Plans
All existing IDR plans will be replaced by just two new options: a Standard Plan and a Repayment Assistance Plan.
PSLF Updated
Payments made under the new repayment plans will count toward Public Service Loan Forgiveness for eligible workers.
Parent PLUS Relief
Borrowers with parent PLUS loans will have more options to enroll in income-based repayment plans.
SAVE Plan Ends
The Biden-era SAVE plan is defunct, and interest will resume on balances for the 8 million borrowers enrolled in it.
While many of the changes won’t take full effect for two years, several major updates are already in motion. In a July 18 letter, the Department of Education outlined the first phase of the overhaul.
What is Borrower Defense to Repayment?
Borrower defense is a rule that allows student debt to be forgiven if a borrower can prove their school defrauded them. The Biden administration tried to simplify the process, but those changes were blocked in court. Under the new law, that program is being delayed again.
Key Dates & Deadlines
No more "partial financial hardship" requirement for IDR plans.
Two new repayment plans officially launch, replacing all others.
Why the Changes Matter
In a statement, Acting Undersecretary James Bergeron called the bill a “big win” for borrowers, emphasizing that it addresses a $10.5 billion shortfall in Pell Grant funding and aims to hold colleges accountable for programs that leave students in debt.
These student loan reforms are part of a broader, and potentially seismic, shift in U.S. education policy. Just days before this announcement, the Supreme Court ruled that Trump has the authority to dismantle the Department of Education, paving the way for deep structural changes. More details are expected in the coming months as the Department works with loan servicers to transition to the new framework.
