Summary
New rules from the U.S. Department of Education will make it easier for more people to qualify for student loan payment plans that lower monthly payments. President Donald Trump's changes to the Income-Based Repayment plan remove the need to prove financial hardship, allowing more borrowers to benefit. Other existing student loan repayment plans will be phased out, but a new Repayment Assistance Plan will be available in 2026.
Key Facts
- The U.S. Department of Education is finalizing updates to student loan repayment plans.
- One major change is removing the requirement to show financial hardship for the Income-Based Repayment (IBR) plan.
- Under President Trump's new rules, more borrowers can qualify for lower monthly payments under IBR.
- The IBR plan links payments to a percentage of discretionary income and can forgive remaining balances after 20 or 25 years.
- President Trump’s plan eliminates the Saving on a Valuable Education (SAVE) plan and will phase out the Income-Contingent Repayment and Pay As You Earn plans by 2028.
- A new Repayment Assistance Plan will be available in July 2026 for loan payments over a longer period (up to 30 years).
- Federal student loan amounts for undergraduate studies are now capped, and the GRAD PLUS program is eliminated, restricting some borrowing options.
- Only students pursuing professional degrees can borrow up to $50,000 per year.
