KEY TAKEAWAYS There are about 3.1 million federal student loan borrowers ages 62 or older, and the average borrower in this age group holds about $44,161 in student loan debt. This age group, many of whom are entering or already in retirement, can face difficulties paying off their student debt with their fixed, and often lower, income. As of September 2025, about 3.1 million federal student loan borrowers were 62 years or older, according to the latest data available from the Federal Student Aid ...

KEY TAKEAWAYS The Department of Education is pausing wage garnishments for the millions of defaulted student loan borrowers.This is a significant reversal: The Department had previously said it would start cutting part of the defaulted borrowers' income in early February. The Department of Education backtracked from previous plans this week, saying it will not cut the wages of defaulted federal student loan borrowers yet. In a press conference on Monday, the Secretary of Education, Linda McMahon, said ...

The federal government has officially resumed garnishing wages and withholding benefits from student loan borrowers after years of legal limbo. The Trump administration has made several moves to limit repayment options and enforce collections after an extended COVID-era pause. The federal Education Department announced a proposed legal agreement to squash the Saving on a Valuable Education, or SAVE, plan in December 2025, dealing a final blow to the Biden administration's efforts to forgive or reduce the ...

Core Insights - The "One Big Beautiful Bill" will significantly change the student loan repayment system starting next year, impacting both current borrowers and those still in school [1] Group 1: Changes to Repayment Plans - The Department of Education will discontinue the Saving for a Valuable Education (SAVE) plan, expected to end in 2026, affecting millions of borrowers who have been in forbearance for over a year [2][4] - Starting July 1, 2026, new borrowers will have two repayment options: the Repayment Assistance Plan (RAP), which is income-driven, and a new tiered Standard Plan based on loan size [5][6] Group 2: Implications for Borrowers - Over 7.7 million borrowers currently on the SAVE plan will need to explore alternative repayment options by 2026 [4] - Borrowers should assess whether the RAP is more beneficial than their current plan, considering their loan balance and future income [7][10] - Online calculators will be provided by the Department of Education to help borrowers compare repayment plans based on their financial situation [8][10] Group 3: Recommendations for Existing Borrowers - Existing borrowers are encouraged to consider transferring to other income-driven repayment plans, such as Income-Based Repayment (IBR), as interest continues to accrue during forbearance [12][14] - It is advised that borrowers who can afford to make payments should transition to IBR sooner rather than later to avoid increasing loan sizes [14][15]

Core Insights - The Saving for a Valuable Education (SAVE) repayment plan for federal student loans is ending, requiring millions of borrowers to select a new, likely more expensive repayment plan [1][11] Group 1: Transition from SAVE Plan - 7.7 million borrowers will soon need to exit the SAVE plan, which was an income-driven repayment plan initiated by the Biden administration [3] - The Department of Education has not set a specific date for when borrowers must leave the SAVE plan but has advised them to transition to another repayment plan now [3][4] - The Income-Based Repayment (IBR) plan is currently recommended as the most stable option for borrowers transitioning from SAVE, as other income-driven plans will be eliminated after July 1, 2028 [4] Group 2: New Repayment Options - A new income-driven repayment plan, the Repayment Assistance Plan (RAP), will offer lower monthly payments than the IBR plan for some borrowers, but it will not be available until at least July 1, 2026 [5] - Payments for borrowers under the IBR and Pay as You Earn (PAYE) plans will be approximately $100 to $200 more per month compared to the SAVE plan, depending on their income and family size [7][8][11] Group 3: Financial Impact on Borrowers - The median yearly income for a worker with a bachelor's degree is $80,132, and a single borrower with this income would see payments increase by about $100 on IBR and PAYE compared to SAVE [7] - For a borrower with a spouse and two children, monthly payments could increase by $200 on IBR and PAYE compared to SAVE, with ICR payments exceeding $500 [8] - Lower-income borrowers, such as those in early childhood education, would face similar increases, with the RAP plan being a more affordable option, albeit not available until mid-2026 [12][13][14]

Core Insights - Student loan borrowers are reducing discretionary spending to manage loan repayments, with many successfully handling their loans, but an increasing number are facing difficulties [2][5]. Spending Impact - The typical student loan borrower has reduced their weekly spending by approximately $12.20 for every $10,000 of student debt, leading to an annual spending cut of about $1,590 for the median borrower with a $25,000 balance [3][4][8]. Borrower Status - Out of 18.8 million borrowers in repayment, nearly 13 million are in good standing, and about 25% expect to pay off their debt by 2026 [6]. - However, over 4 million borrowers are nearing default, which is more than eight times the number of seriously delinquent borrowers prior to the pandemic [7]. Economic Context - Borrowers are facing challenges due to rising prices from tariffs and a slowing labor market, compounded by confusion over changing student loan policies [8].

This week, the Trump administration announced a proposed settlement with the state of Missouri that said it would end the Saving on a Valuable Education (SAVE) plan — upending the repayment plans of millions of student loan borrowers across the country. Initially, President Trump’s One Big Beautiful Bill had set the student loan repayment plan's expiration date as July 1, 2028. However, the new deal, which is pending court approval, would end it even sooner than expected. The Department of Education said ...

Core Insights - A new income-driven repayment plan, the Repayment Assistance Plan (RAP), is set to be implemented by July 1, 2026, replacing existing income-driven plans and potentially increasing costs for certain borrowers, particularly low-income individuals [3][4][19] Summary by Category New Repayment Plan - The RAP will open for enrollment by July 1, 2026, and will eliminate all existing income-driven repayment plans within three years [3] - Borrowers who take out loans before the implementation date can still enroll in the current Income-Based Repayment (IBR) plan [3] Impact on Borrowers - Monthly payments under RAP are expected to be significantly higher for lower-income borrowers compared to the IBR plan, with some facing payments of at least $10 per month instead of $0 [4][14] - The average lower-income borrower could pay 734% more under RAP than under IBR, with total payments over the life of the loan increasing from $0 to $12,287 for those with families [14][19] Financial Examples - A borrower with an annual income of $23,475 would pay $4,512 over 20 years under IBR, while under RAP, they would pay $38,510 over 30 years [9][10] - For an average income borrower earning $68,400, total payments would be $54,867 under IBR and $55,165 under RAP, indicating minimal difference for this income bracket [15][18] Additional Provisions - The Department of Education will contribute up to $50 a month to lower the principal balance for borrowers, but this support may not be sufficient for those with low incomes and high loan amounts [13]

Core Insights - The article addresses the challenges faced by recent graduates, particularly in managing student loans before securing employment [1][2] Group 1: Deferment Options - New graduates often struggle to manage living expenses and loan payments without income, making deferment options crucial [3] - Federal student loans typically offer a six-month grace period post-graduation, during which payments are not required, although interest may accrue on private loans [3] - Making small payments during the grace period can help reduce long-term interest costs [3] Group 2: Income-Driven Repayment Plans - Most federal borrowers qualify for income-driven repayment plans, which adjust monthly payments based on income [4] - Plans such as Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR) provide options for managing payments and potential forgiveness of remaining balances after a set term [5] - PAYE caps payments at 10% of discretionary income, while IBR bases payments on income and family size, forgiving balances after 20 or 25 years [5]

Core Insights - Student loan borrowers are reducing discretionary spending to manage loan repayments, with many successfully handling their loans, but an increasing number are facing difficulties [2][5][6] Spending Adjustments - The typical student loan borrower has reduced their weekly spending by approximately $12.20 for every $10,000 of student debt, leading to an annual spending cut of about $1,590 for the median borrower with a $25,000 balance [3][4][9] Borrower Status - Out of 18.8 million borrowers in repayment, nearly 13 million are in good standing, while about 25% expect to pay off their debt by next year [6][9] - Over 4 million borrowers are nearing default, a figure that is more than eight times the pre-pandemic delinquency rate [7] Economic Context - Borrowers are facing challenges due to rising prices from tariffs and a slowing labor market, complicating their ability to budget for loan payments [8]