Understanding Student Loan Repayment Plan Changes: What Borrowers Need to Know in 2025

If you’ve got federal student loans, there’s a lot changing in 2025. New laws and court decisions have shifted the ground under everyone’s feet, and it’s easy to get lost in the details. The student loan repayment plan changes coming up will affect nearly every borrower, from those just out of school to folks who’ve been paying for years. This article breaks down what’s happening, who’s affected, and what you need to watch out for as you plan your next steps.

Key Takeaways

• Major updates to student loan repayment plans are taking effect in 2025, including the end of some popular options and new requirements for others.

• Borrowers are divided into groups based on when they took out their loans, which affects what repayment plans they can use after July 1, 2026.

• The SAVE plan has been blocked by the courts, so borrowers in that plan will need to pick a new repayment option soon.

• Public Service Loan Forgiveness rules and employer eligibility are being reviewed, and some changes could come from new executive orders or laws.

• Interest will start building up again for many loans in August 2025, so it’s important to check your account and recalculate your payments.

Overview of Student Loan Repayment Plan Changes in 2025

Major Federal Policy Shifts and Recent Legislation

In 2025, federal student loan repayment policies are shifting in a way that impacts millions of borrowers with current or future debt. In July, a major legislative overhaul was signed into law, restructuring how federal student loans are managed and repaid. You’ll notice big changes compared to past years, from new repayment plan rules to eligibility depending on when you took out your loans. The Department of Education will spend the rest of the year figuring out the details—so expect further updates as regulations are set.

Key points from the new law:

• Several existing repayment and forgiveness options are being phased out or changed.

• Borrowers are split into two categories (before or after July 1, 2026 originations).

• A brand new Repayment Assistance Plan (RAP) will roll out for future borrowers (see RAP details).

Borrowers may feel overwhelmed, but understanding where you fit in these new rules is the first step.

Dividing Borrowers by Loan Origination Dates

For a lot of people, whether your loans were disbursed before or after July 1, 2026, will determine the repayment plans available.

Here’s how the division works:

Loan Origination Time	Repayment Options Retained
Before July 1, 2026	Can keep some current plans (e.g., IBR), lose others (e.g., SAVE)
After July 1, 2026	Only RAP and new Standard Repayment Plan

• If you have older loans, you might be able to stick to some familiar plans, but not all.

• New borrowers will have fewer choices, mainly RAP and a modified fixed plan.

• Some plans are no longer offering forgiveness or will be phased out entirely.

Key Dates and Deadlines Affecting Borrowers

Several deadlines and milestones matter as the new changes take effect:

1. July 1, 2026: The main cutoff for access to legacy repayment plans.

2. February 2026: Many loan servicers now require recertification for income-based plans starting this month.

3. Late 2025: Expect announcements clarifying which existing plans you may remain on if your loan predates the cutoff.

4. 2028: Full phase-out for certain legacy plans, so keep track if you're still in repayment by then.

• Set calendar reminders for your next recertification and payment dates.

• Read communications from your loan servicer about changing or phasing out plans.

All in all, there’s a lot to keep in mind, with moving parts for both current and future borrowers. Start preparing now so you’re not caught off guard when the deadlines hit.

Status and Legal Challenges of the SAVE Repayment Plan

Court Decisions Impacting SAVE

The SAVE (Saving on a Valuable Education) repayment plan has been under heavy scrutiny and legal pushback since mid-2024. After nearly 7.7 million borrowers joined the program, several state attorneys challenged its structure. In June 2024, a federal court halted signature parts of the SAVE Plan, instituting a temporary injunction. This was upheld by the Eighth Circuit in February 2025. Most recently, an April 2025 district court ruling required the Department of Education to begin restarting interest accrual and end the freeze on payments by August 1, 2025.

Key court actions:

• June 2024: Parts of SAVE Plan blocked; interest and payments paused.

• Feb 2025: Appeals court upholds injunction, sends case back for full review.

• April 2025: Enforcement orders: interest begins accruing August 1, payments resume.

Federal courts found the SAVE plan unlawful, leading Congress and the Department of Education to remove the plan from the active list of repayment options, as described in the future two-plan system.

Implications for Borrowers Enrolled in the Plan

The outcome for current SAVE borrowers is messy. Right now, borrowers in SAVE see no progress toward forgiveness programs, as the courts blocked all qualifying payment progress and interest cancellation. Starting August 1, 2025, interest will begin accruing again, and borrowers will receive notices to switch to a new plan.

Borrowers should keep these issues in mind:

• No payment or interest accrual until August 1, 2025, but also no time counted toward loan forgiveness deadlines during this period.

• Once interest resumes, loan balances will grow if no payments are made.

• Those seeking Public Service Loan Forgiveness (PSLF) or other discharge programs must move to a legally compliant repayment plan, such as the Income-Based Repayment (IBR) option.

Many borrowers who counted on the promises of the SAVE program are now in limbo, responsible for their loans but with no real path to forgiveness unless they adjust to different plans.

Transitioning from SAVE to Other Repayment Options

With the dismantling of SAVE, borrowers must take action this year to maintain a manageable payment structure and preserve any progress toward forgiveness. The Department of Education began outreach to affected borrowers and encouraged them to compare repayment options using tools like the Loan Simulator.

Steps for borrowers:

1. Review notices from your loan servicer regarding the end of SAVE and start of interest accrual.

2. Compare new repayment plan options on StudentAid.gov.

3. Submit an application for another qualifying plan (IBR, PAYE, or ICR) as soon as possible to avoid payment gaps.

A comparison of key options:

Repayment Plan	Monthly Payment Basis	Forgiveness Standard	Enrollment Status (2025)
SAVE	% of discretionary income	20-25 years	Obsolete/Blocked
IBR	% of income (Higher)	20-25 years	Open
PAYE/ICR	% of income (Varies)	20-25 years	Open (but phasing out)
RAP (2026+)	Income-based, new terms	30 years	Launching 2026

Switching out of SAVE before payments restart helps borrowers secure a legal plan and start making qualifying payments for forgiveness or discharge again. For more background on these coming changes and their long-term effects, check the simplified system outlined for 2026.

New and Revised Repayment Plans for Federal Student Loans

Federal student loan repayment options are in for a shakeup in 2025, and quite a few policies are changing based on recent legislation and shifting Department of Education priorities. The goal seems to be simplifying choices for future borrowers, while adjusting conditions for those already repaying—especially now that some plans are being phased out and a brand-new one is added to the mix.

Repayment Assistance Plan (RAP) Details and Requirements

The Repayment Assistance Plan (RAP) is coming into effect for loans issued on or after July 1, 2026. RAP is different from previous income-driven plans, especially in how it calculates what you owe each month. Instead of excluding a chunk of your income from repayment calculations, RAP uses your full adjusted gross income (AGI), minus set deductions, to figure out monthly bills.

Main features of RAP include:

• Monthly payments will range from 1% to 10% of your AGI.

• Everyone will pay at least $10 a month—no more $0 payments for low-income borrowers.

• RAP offers forgiveness after 30 years, which is longer than the now-defunct SAVE and older IDR plans (which were 20 or 25 years).

• The plan is only available to those taking out new loans starting July 1, 2026; existing borrowers can stick with their current choices (for a while).

Feature	RAP (2026+)	Previous IDR Plans
Monthly Payment	1–10% of AGI, $10 min	10–15% of Discretionary Income, may be $0
Forgiveness Term	30 years	20 or 25 years
Protects Income	No	Yes

Borrowers who expected more affordable monthly payments under old IDR plans need to review RAP details closely, especially if planning for long-term forgiveness.

Standard Repayment Plan Updates

Changes to the Standard Repayment Plan are coming for future borrowers. Instead of a simple 10-year plan for everyone, the new structure splits repayment into four possible lengths, based on how much you’ve borrowed. For folks taking out loans before July 1, 2026, the original plan remains, but new borrowers will fall under updated terms.

• The more you borrow, the longer your repayment period can be, up to a set maximum.

• Old loans (issued before July 1, 2026): still 10 years, fixed payments.

• New loans: could be up to 25 years, depending on balance.

This new approach can mean lower monthly payments, but a higher overall interest cost.

Phasing Out of PAYE and ICR Options

The authority to enroll in the Pay As You Earn (PAYE) and Income-Contingent Repayment (ICR) plans is ending. If you’re already in one of these plans, you can typically stick with it for now, but new enrollees will soon be blocked entirely.

• PAYE and ICR enrollment cuts off July 1, 2028.

• Neither plan leads to guaranteed forgiveness anymore—this feature was removed following court and legislative changes.

• Staying on PAYE or ICR only makes sense if you have a specific reason, like an old loan still qualifying for PSLF.

• The main options will soon be RAP or the updated Standard Plan for most future borrowers.

For more on how the new rules might affect those in Income-Based Repayment, major IBR changes are explained in recent updates for 2025.

The Department of Education encourages existing borrowers to carefully consider moving to the latest versions of repayment plans, because legacy options will not offer the same benefits going forward. Always check your eligibility window and compare plans on StudentAid.gov, especially if your loans are disbursed across different years.

Changes to Income-Driven Repayment (IDR) Plans

The student loan landscape is shifting fast in 2025, and Income-Driven Repayment (IDR) plans are right at the center of these changes. Many borrowers might not have expected just how different things would look by now, but federal laws and court actions have made a real impact. Let’s break down the important adjustments to IDR options, especially if you depend on them to manage your loans.

Alterations to Income-Based Repayment (IBR)

The most significant update for 2025 is that the IBR plan no longer requires proof of partial financial hardship. This change should, in theory, open the plan to more people:

• Payments are set at 10% of your discretionary income for most, or 15% for older loans.

• Some borrowers, mainly those with loans from before July 2014, are still seeing a 25-year forgiveness timeline instead of 20 years.

• Recent legal challenges have frozen the discharge (forgiveness) part of IBR. Right now, periods that used to count toward forgiveness might not be eligible, and the Department of Education says they’re updating everyone’s payment counts.

Feature	IBR (Pre-2025)	IBR (2025)
Hardship Required	Yes	No
Forgiveness Term	20/25 years	20/25 years
Discharge Status	Available	On Pause

If you’re in IBR and hoping for eventual forgiveness, you’ll need to wait for further updates about which payments will count. It’s recommended to look for changes to repayment eligibility throughout 2025.

Paused Loan Discharge Components for IDR Plans

As a result of multiple court decisions, all discharge programs tied to IDR plans — where you’d have your loan debt wiped away after 20 or 25 years — are on hold. At the moment:

• No new loans are being fully forgiven through IBR, PAYE, or ICR.

• You may need to keep making payments even after reaching the original forgiveness term.

• Payment histories are being reviewed and updated, so qualifying payment counts may change soon.

Impact on Forgiveness Timelines and Qualifying Payments

IDR plan forgiveness used to be fairly predictable, but now:

1. Timelines are shifting, in some cases adding years to when you could have your loans forgiven.

2. Payment counting is up in the air, especially for anyone who had periods of deferment, forbearance, or switched plans recently.

3. New IDR plans are coming — like the Repayment Assistance Plan (RAP), which promises forgiveness only after 30 years and will use a payment calculation based on your adjusted gross income.

Plan Type	Forgiveness Timeline (Old)	Forgiveness Timeline (New)
IBR	20/25 Years	Paused (date unclear)
RAP (2026+)	N/A	30 Years

Right now, the best steps are to keep track of your payment history and review your eligibility for every plan, especially if you’re looking for an option that still counts toward forgiveness. Consider the alternatives on federal repayment options and talk with your loan servicer if you’re unsure which plan you should pick going forward.

Public Service Loan Forgiveness (PSLF) Program Developments

Recent Executive Orders and Employer Eligibility

A new executive order in March 2025 has added uncertainty for borrowers counting on PSLF. This order, called "Aligning Public Service Loan Forgiveness with Actual Public Service," introduces restrictions on which organizations are considered qualifying employers. Specifically, some nonprofits and government agencies could lose eligibility if they’re found to be involved in what the administration calls “substantially illegal activities.” The criteria cover a range of activities and have already sparked debate over how these will be enforced.

• Not all changes are immediate—adapting the PSLF structure takes time. New rules will require a lengthy federal rulemaking process.

• Borrowers who already made qualifying payments shouldn’t see those payments retroactively affected.

• Watch for updates, as legal and regulatory battles are expected, meaning some provisions could be delayed or modified before taking effect.

Here's a quick overview of what currently counts for PSLF:

Requirement	Description
Employment	30+ hours/week at a qualifying employer
Loan Type	Direct federal loans only
Repayment Plan	Income-Driven Repayment (IDR) plan
Qualifying Payments	120 monthly, on-time payments

While policy changes may come into play in 2026, for most borrowers today, PSLF is still available if you meet the program's existing rules.

Certification Date Adjustments and Tracking Payments

Certification timelines for verifying PSLF employment and payment progress have stretched into 2026. Loan servicers are now pushing most certification renewal deadlines until at least February 2026. Plus, the Department of Education temporarily removed the online tool for tracking payments, so it’s harder to see real-time progress toward forgiveness.

Steps to stay on track despite these changes:

1. Log in to your StudentAid.gov dashboard regularly to check for PSLF updates.

2. Keep paper or digital records of your employment certification forms.

3. Watch for announcements on when the payment-tracking tool will be restored.

Preparing for Potential Legislative Modifications

The PSLF program has always had a target on its back, and 2025 brought new proposals that could affect future borrowers:

• Congress and the Department of Education are both debating changes, including employer definitions and even possible caps on forgiven amounts.

• If you’re pursuing PSLF, consider building a "side fund"—a small savings pot that you could use to pay down your loans in case the program changes or is cut.

• Borrowers may be "grandfathered in" under current rules if changes take effect, but nothing's guaranteed.

If you have federal loans and plan to use them for public service loan forgiveness, keep your eye on these shifting policies. Double-check your employment status, file your annual forms, and review all forgiveness options for federal borrowers when considering next steps.

Waiting to see how these proposals play out may be stressful, but preparing for different outcomes and setting up backup plans could soften the blow if future rules change.

Guidance for Borrowers Navigating Repayment Plan Changes

Using StudentAid.gov for Account Management

The main place to check all your federal student loan details and options is StudentAid.gov. Always log in to this site to review your loan balance, servicer contact, and repayment plan status. If you’re unsure of your current repayment plan, the dashboard will show the details. For most borrowers, the site offers tools including:

• The Loan Simulator: Predicts payments under different plans.

• Plan comparison charts: Help you weigh which options are available for your loan type and origination date.

• Easy links to recertify your income or update family size if you’re in an IDR plan.

If you don’t see your servicer listed or have trouble getting information, double-check that your loan wasn’t recently transferred to a new company, as that’s been happening a lot since 2024.

If your loan account info seems out of date or missing, reach out to your loan servicer right away to sort things out before the next payment deadline.

Strategies for Selecting a New Repayment Plan

Picking the right repayment plan now is harder than ever since so many options have changed or disappeared. Here are a few steps to help decide:

1. Check if your current plan will still be offered in 2026. Many older plans are either going away or closing to new borrowers.

2. Take a close look at your income and family size for IDR options. These plans often keep monthly payments the lowest—but rules around forgiveness and plan duration are changing.

3. If you were on SAVE, be aware it’s no longer available. You may want to move to the Income-Based Repayment (IBR) plan for now, since other plans like PAYE and ICR are closing.

4. If you expect to work in public service or a qualifying nonprofit, make sure your plan qualifies for loan forgiveness like PSLF.

Key factors to compare:

Repayment Plan	Max Years	Forgiveness Eligible	Payment Based On Income?
Income-Based Repayment (IBR)	20-25	Yes	Yes
Standard Repayment	10	No	No
Repayment Assistance Plan (RAP - new 2026)	20+	Yes	Yes

If you’re stuck, don’t hesitate to reach out to your loan servicer’s help line, or check with a non-profit student loan advisor for guidance.

Evaluating Forgiveness and Refinancing Alternatives

Forgiveness programs and refinancing are two very different paths. Right now, many forgiveness options, like the SAVE plan, have changed or ended — and Public Service Loan Forgiveness (PSLF) rules may soon get stricter for some employers. Here’s how to think about next steps:

• If you’re close to forgiveness (for example, those in PSLF or with many IDR payments), avoid refinancing, as you’ll lose those credits.

• If you have a good credit score and a steady job outside public service, refinancing to a private loan could save you interest, but you’ll lose federal protections and deferment rights.

• Watch forgiveness timelines — with some elements on hold, you may want to see how new laws play out in 2026.

Consider:

• Losing federal benefits when refinancing

• How new executive orders or rules might change PSLF and IDR options

• Your risk tolerance if another long pause or debt relief program comes up

Many borrowers find the changes overwhelming, but taking a few minutes to compare your updated options now can save you thousands later. Stay alert for any new notices in your StudentAid.gov account or by email from your loan servicer.

Interest Accrual and Payment Resumption in 2025

End of Forbearance Periods and Restart of Interest

After a lengthy period where many borrowers experienced a payment and interest freeze, interest on most federal student loans will restart on August 1, 2025. This includes borrowers who were in the now-enjoined SAVE plan. The court injunction against SAVE means the Department of Education no longer has the authority to hold interest at zero percent. Payments that were paused in 2024 due to ongoing legal disputes will soon be due—unless a borrower modifies their repayment strategy.

Here’s what borrowers should expect:

• Interest accrual restarts for all paused federal loans on August 1, 2025.

• Forbearance programs that kept balances steady now allow interest to accumulate.

• Outreach from loan servicers will provide instructions for moving into legal repayment plans.

If you’ve been in a payment freeze, it’s important to prepare for higher bills soon, as the government cannot keep interest rates at zero any longer due to legal requirements.

Further details on updated repayment structures can be found in this brief summary of repayment changes.

Calculating New Monthly Payment Amounts

With interest once again accruing, it’s time to figure out your new monthly dues. The exact payment depends on your type of loan, selected plan, and current balance. For those shifting from the discontinued SAVE plan, payments may be noticeably higher under a plan like IBR or Standard Repayment. Here’s a quick table showing how a loan’s monthly payment can adjust based on plan and balance:

Loan Balance	Plan Type	Estimated Payment	Interest Rate
$20,000	IBR (10% income)	$125–$170	5.5–6.8%
$20,000	RAP (min $10)	$10–$175	5.5–6.8%
$20,000	Standard (10yr)	$215	6.2%

When recalculating payments, make sure to:

• Review updated income information and household size.

• Consider if your loans have capitalized interest due to the payment pause.

• Compare available plans, including the new Repayment Assistance Plan (RAP) set for wider rollout in 2026.

Avoiding Negative Amortization and Managing Accrued Interest

Negative amortization, where unpaid interest gets added to your loan’s principal, became a bigger risk during the payment freeze—especially as protective measures from SAVE are no longer in place. With interest now resuming, it’s key to minimize additional charges.

To keep interest from snowballing:

1. Enroll in a repayment plan that fits your budget to avoid missed payments.

2. Pay at least the monthly interest to prevent loan growth.

3. Confirm your loan’s status using your loan servicer’s website or StudentAid.gov.

Remember, even small extra payments on top of your required minimum can help reduce the impact of new interest.

If you only pay the minimum, your balance could increase due to accrued interest. Even a small extra payment each month goes directly toward the interest and helps manage total debt.

Federal changes coming in 2025 place increased pressure on borrowers, but awareness and proactive planning can help reduce the risks of growing loan balances and unmanageable monthly dues.

Starting in 2025, interest will be added to your student loans again, and you’ll need to start making payments. It’s important to get ready for this change so you don’t fall behind. Want some help getting prepared? Visit our website today and let us guide you through your next steps.

Conclusion

Student loan repayment is changing a lot in 2025, and it’s easy to feel lost with all the updates and new rules. The end of the SAVE plan, new legal decisions, and the introduction of plans like RAP mean borrowers need to pay close attention to what’s happening. If you have federal loans, check your StudentAid.gov account often and read any messages from your loan servicer. If you’re not sure what to do next, don’t be afraid to ask for help—there are official resources and counselors who can walk you through your options. The most important thing is to stay informed and act when needed, so you don’t miss out on benefits or end up paying more than you have to. As more changes roll out, keep an eye on updates and be ready to adjust your plan if needed.

Frequently Asked Questions

What are the main changes to student loan repayment plans in 2025?

In 2025, new federal laws have changed how student loan repayment works. Borrowers are now split into two groups based on when they took out their loans. People with loans from before July 1, 2026, can still use some old repayment plans, but new borrowers after that date have fewer choices. Some plans, like the SAVE plan, have been ended due to court decisions and new laws.

What happened to the SAVE repayment plan?

The SAVE plan was stopped by the courts and is no longer available. Borrowers in SAVE had their payments paused for a while, but starting August 1, 2025, interest will begin to add up again. These borrowers need to switch to another repayment plan, such as the Income-Based Repayment (IBR) plan, to keep making progress toward paying off their loans.

How do I know which repayment plans I can choose from?

Your options depend on when you took out your loans. If your loans are from before July 1, 2026, you may still have several plans to pick from, like IBR or the Standard Repayment Plan. If your loans are from after that date, you will mostly have the new Repayment Assistance Plan (RAP) or an updated Standard Repayment Plan. You can check your choices and apply for a plan by logging in to your account at StudentAid.gov.

What should I do if I was in the SAVE plan and now need a new plan?

If you were in the SAVE plan, you should log in to StudentAid.gov and use the Loan Simulator tool to see which repayment plan fits your needs best. The government is telling borrowers in SAVE to move quickly to a new plan, like IBR, so you can start making qualifying payments again and avoid growing interest.

How do the changes affect Public Service Loan Forgiveness (PSLF)?

PSLF is still available, but there are new rules about which jobs count. An executive order in March 2025 changed which employers are eligible, so it’s important to check if your job still qualifies. Also, the dates for certifying your employment have been moved back, and you should keep good records of your payments and employer certifications.

Where can I find help or more information about my student loans?

For the most up-to-date information, visit StudentAid.gov. You can also find out who your loan servicer is and contact them for help. If you need more personal advice, reach out to your loan servicer directly or check the Federal Student Aid Help Center for trusted resources.