economy
‘Frustration, anger, confusion’: Trump administration leaves millions without clear path to paying off student loans
Court’s decision to eliminate Save plan and internal shuffling on who handles what when it comes to student loans presents new challenges for borrowers
TL;DR
- A federal appeals court has ordered the end of the Biden-era Save Plan for student loans.
- New data reveals 7.7 million borrowers defaulted on $181 billion in federal student loans by the end of 2025.
- The Save Plan, launched in 2023, aimed to reduce monthly payments and offer early forgiveness.
- Republican attorneys general sued to end the Save Plan, citing executive overreach and taxpayer costs.
- The Education Department will provide guidance on moving borrowers from the Save Plan to legal repayment options.
- The Trump administration is shifting the student loan portfolio to the Treasury Department.
- Experts cite confusion, anger, and disengagement among borrowers due to these changes.
- Borrowers are advised to log in to StudentAid.gov, check loan details, and consider immediate changes to their repayment plans.
- The Education Department removed its payment tracking tool in April 2025 and does not plan to reinstate it.
- Alternative Income-Driven Repayment (IDR) plans include IBR, PAYE, and ICR, with PAYE and ICR phasing out by June 2028.
- A new Repayment Assistance Plan (RAP) will be available from July 2026 for new borrowers, with different payment calculations and terms.
- New borrowers after July 1, 2026, will only have access to RAP or the standard repayment plan.
- Experts stress the importance of borrowers understanding their individual financial situation to choose the best repayment strategy.