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]