What Changes to Student Loan Policy Mean for Borrowers Over 40

Core Insights - The demographic of federal student loan borrowers is shifting, with over half now aged 35 or older, and this group holds approximately two-thirds of the total outstanding federal student loan balance [1] - Repayment stress is particularly acute among older borrowers, with at least 25% of borrowers over 40 either 90 days past due or in default [2] - The financial burden of student loans is compounded for older borrowers due to additional responsibilities such as mortgages and dependents, as well as loans taken for their children [3] Borrower Vulnerability - The risk of default increases with age, as evidenced by a 57% rise in federal student loan borrowers aged 62 and older from 2017 to 2023 [4] - The unraveling of the SAVE income-driven repayment plan is adding to the financial stress experienced by borrowers [5][6] Upcoming Changes in Repayment Plans - The Department of Education plans to stop SAVE enrollments and transition existing borrowers to a new repayment plan called the Repayment Assistance Plan (RAP) starting July 1, 2026 [6][7] - RAP aims to simplify repayment options and address the shortcomings of the current system [7]