Big changes are coming for millions of student loan borrowers in the United States. Following the passage of a new tax and spending bill signed by former President Donald Trump, the Department of Education is beginning to roll out new student loan repayment rules. These reforms mark a significant shift in how federal student loans will be borrowed and repaid — with more changes expected in the coming months and years.
While most of the new provisions won’t take effect until July 1, 2026, some key updates are already being implemented. From new income-driven repayment plans to borrowing limits and eligibility tweaks, these changes aim to simplify the repayment process — though some may find them less generous than previous options.
What’s Changing in Student Loan Repayment?
The Department of Education announced on July 18 that it has started working with student loan servicers to prepare for several major updates. Here’s a breakdown of the upcoming changes:
Immediate and Upcoming Reforms:
- No More Financial Hardship Requirement: Borrowers will no longer need to prove partial financial hardship to qualify for an income-based repayment (IBR) plan.
- Parent PLUS Loan Access Expanded: More flexibility will be given to parent PLUS loan borrowers, allowing them to access IBR plans.
- Borrowing Limits for Part-Time Students: Students enrolled in less than full-time programs will face new restrictions on how much they can borrow.
- Delay in Biden-Era Relief Rules: Implementation of the Borrower Defense to Repayment and Closed School Discharge rules — introduced under President Biden — has been put on hold.
These Biden-era programs were meant to make it easier for defrauded students or those affected by school closures to get loan forgiveness. However, those changes were blocked in court and never took effect.
Two New Income-Driven Repayment Plans Coming in 2026
One of the biggest changes coming in 2026 is the elimination of all existing income-driven repayment (IDR) plans, including the SAVE plan, and the creation of two new repayment options:
- Standard Repayment Plan
- Repayment Assistance Plan:
- Monthly payments will range between 1% to 10% of a borrower’s income
- Any remaining loan balance will be forgiven after 30 years
Compared to the SAVE plan — which allowed for lower monthly payments and quicker debt relief — these new options are less generous. As of July 9, interest has also resumed on balances for borrowers enrolled in the SAVE plan.
Public Service Loan Forgiveness Program Amended
There’s good news for those working in public service. The Department of Education is modifying the Public Service Loan Forgiveness (PSLF) program to count payments made under the new income-driven plans toward loan forgiveness. This applies to borrowers working for qualifying government or nonprofit employers who make 10 years of eligible payments.
What the Administration Is Saying
Acting Undersecretary James Bergeron described the bill as a win for borrowers, saying it simplifies the system and ensures better support for workforce training. According to Bergeron:
“Trump’s spending bill delivers for student borrowers in a big way — simplifying the student loan repayment system, funding the $10.5 billion Pell Grant shortfall, supporting career-focused programs, and holding colleges accountable.”
The administration is also moving ahead with plans to dismantle the Department of Education itself. A Supreme Court ruling on July 14 cleared the path for Trump to begin firing department staff — signaling an even more dramatic shift in federal education policy in the months to come.
What Borrowers Should Expect Next
More updates and detailed guidance are expected in the coming weeks and months. Borrowers are encouraged to stay informed and watch for notices from their loan servicers or the Department of Education.
Whether you’re repaying loans now or planning to borrow in the future, these changes will likely affect your options and costs. Staying proactive and understanding the new rules will be key to navigating the evolving student loan system.
