Experts Advise Federal Student Loan Borrowers on Upcoming Changes

Repayment options to be streamlined, with new plans and deadlines for existing borrowers

Published on Feb. 26, 2026

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With major changes to federal student loan repayment plans coming in July 2028, experts are urging the over 43 million Americans with existing federal student loan debt to carefully review their options and make any necessary changes before the new system takes effect. Borrowers on current income-driven repayment plans will have just two years to choose between the existing Income-Based Repayment (IBR) plan or a new Repayment Assistance Plan (RAP), while Parent PLUS loan holders face an even tighter deadline to consolidate and switch to an income-driven plan by July 2026.

Why it matters

The overhaul of federal student loan repayment plans aims to simplify the system, but the transition period could create confusion and challenges for existing borrowers. Experts warn of a potential 'default crisis' as some more lenient plans sunset, underscoring the importance for borrowers to proactively manage their loans to avoid falling behind on payments.

The details

The changes, passed as part of President Trump's One Big Beautiful Bill Act, will streamline the repayment system from multiple plans down to just the standard plan and the new RAP. Existing borrowers will be 'grandfathered' into their current plans for two more years, but must act before July 2028 to choose between IBR and RAP. Parent PLUS loan holders face an even tighter deadline, needing to consolidate and switch to an income-driven plan by July 2026 before that option disappears. Borrowers on the now-defunct SAVE plan are in limbo as a court considers ending the program. Experts advise all borrowers to review their options annually, especially around tax time when income and financial situations may change.

  • The changes will take effect on July 1, 2028.
  • Parent PLUS loan holders must consolidate and switch to an income-driven plan by July 1, 2026.

The players

Betsy Mayotte

Founder of The Institute of Student Loan Advisors.

Preston Cooper

Senior fellow at the American Enterprise Institute.

Winston Berkman-Breen

Legal director at Protect Borrowers.

Linda McMahon

Education Secretary under the Trump administration.

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What they’re saying

“I think that if you are a much older borrower, you're closer to that 20- or 25-year mark for forgiveness, you're probably going to be better off choosing the Income-Based Repayment plan because you'll have fewer years to pay.”

— Preston Cooper, Senior fellow at the American Enterprise Institute (PBS NewsHour)

“You're probably going to be better off with RAP because you really want to take advantage of those those interest waivers to limit how much your balance is going to balloon in the early years.”

— Preston Cooper, Senior fellow at the American Enterprise Institute (PBS NewsHour)

“It's not when you apply for the consolidation, it's when it goes through. So you could apply today and if there's a crazy backlog and they don't get to you until after July 1, then you no longer have access to all of this and you only have access to the new plans.”

— Winston Berkman-Breen, Legal director at Protect Borrowers (PBS NewsHour)

What’s next

The judge in the case will decide on Tuesday whether or not to allow the proposed settlement to end the SAVE repayment plan.

The takeaway

This transition period for federal student loan repayment plans highlights the importance for borrowers to proactively manage their loans, review their options annually, and make any necessary changes before upcoming deadlines to avoid potentially costly consequences down the road.