Nearly a third of student loan borrowers under repayment plans will have to switch plans by 2028.The change comes along with the overhauling of the federal student loan repayment system. The One Big Beautiful Bill Act, signed by President Donald Trump earlier this month, makes several changes to the student loan repayment system, including the sunsetting of income-contingent repayment plans. It consequently removes the legal grounding for plans like the Saving on a Valuable Education plan.The Hearst Television Data Team analyzed the most recent data from Federal Student Aid and found there were more than 10 million federally managed student loans on these repayment plans as of Dec. 31, 2024, that will need to be switched by July 1, 2028.Student loan repayment plans can be broken down into two types. The first are standard plans, similar to a mortgage, that are paid over a fixed period of time. The second are income-driven repayment plans, which include a calculation that incorporates income.More than 13 million federally managed loans in repayment, forbearance or default are currently under income-driven repayment plans as of the end of 2024, according to data from FSA. That’s nearly 39% of the U.S. loan portfolio. Of the borrowers on income-driven plans, the majority — almost 79% — are under those plans that will be terminated by July 1, 2028. The remaining 21% of those borrowers are on income-based plans that are not going away."This is a big deal because the vast majority of borrowers in income-driven plans right now are not in those plans. They're in the plans that are being closed,” said Jessica Thompson, senior vice president at The Institute for College Access and Success.Advocates warn that the changes made in the One Big Beautiful Bill Act make a confusing situation even more confusing for borrowers."If it sounds confusing, it's because it is confusing, right?" said Aissa Canchola Bañez, policy director at the Student Borrower Protection Center. "I think what's challenging here is that this bill makes an already very complicated system even more complicated for folks who are really struggling right now," Bañez said.For the 7.8 million borrowers on the SAVE plan with interest resuming Aug. 1, a choice will need to be made sooner. With Trump’s One Big Beautiful Bill Act signed into law and SAVE borrowers accruing interest, any person who switches from SAVE to an income-contingent repayment plan will end up having to switch again."It's unfortunately more complicated than it should be, and I think it's going to create a lot of confusion," said Thompson. "And this is why we're super concerned about a default crisis, just, you know, amassing."Borrowers who try to switch plans may be stuck waiting. In June, the backlog of applications for income-driven repayment plans hit 1.5 million, according to the National Association of Student Financial Aid. Nearly 60% of loan recipients on income-driven plans were on the SAVE plan, according to the most recent data from FSA. FSA does not publish data on SAVE recipients by state, but does publish the number of income-driven repayment plan recipients by state.Here's where they are located:With the changes made to federal student loans, more students may start taking out private student loans or choosing not to attend college, advocates say."I think we are going to see paying for college get more expensive and more risky, particularly for lower-income families and families that do not come from significant means," Bañez said.People who borrow starting July 1, 2026, will also have a new wave of rules, including access to just two repayment plans: a revised standard plan and one income-based repayment plan. These repayment plan changes are in addition to new loan caps, the termination of the direct PLUS loans for graduate and professional students and changes to which plans parents with a PLUS loan qualify for.PHNjcmlwdCB0eXBlPSJ0ZXh0L2phdmFzY3JpcHQiPiFmdW5jdGlvbigpeyJ1c2Ugc3RyaWN0Ijt3aW5kb3cuYWRkRXZlbnRMaXN0ZW5lcigibWVzc2FnZSIsKGZ1bmN0aW9uKGUpe2lmKHZvaWQgMCE9PWUuZGF0YVsiZGF0YXdyYXBwZXItaGVpZ2h0Il0pe3ZhciB0PWRvY3VtZW50LnF1ZXJ5U2VsZWN0b3JBbGwoImlmcmFtZSIpO2Zvcih2YXIgYSBpbiBlLmRhdGFbImRhdGF3cmFwcGVyLWhlaWdodCJdKWZvcih2YXIgcj0wO3I8dC5sZW5ndGg7cisrKXtpZih0W3JdLmNvbnRlbnRXaW5kb3c9PT1lLnNvdXJjZSl0W3JdLnN0eWxlLmhlaWdodD1lLmRhdGFbImRhdGF3cmFwcGVyLWhlaWdodCJdW2FdKyJweCJ9fX0pKX0oKTs8L3NjcmlwdD4=
WASHINGTON — Nearly a third of student loan borrowers under repayment plans will have to switch plans by 2028.
The change comes along with the overhauling of the federal student loan repayment system. The One Big Beautiful Bill Act, signed by President Donald Trump earlier this month, makes several changes to the student loan repayment system, including the sunsetting of income-contingent repayment plans. It consequently removes the legal grounding for plans like the Saving on a Valuable Education plan.
The Hearst Television Data Team analyzed the most recent data from Federal Student Aid and found there were more than 10 million federally managed student loans on these repayment plans as of Dec. 31, 2024, that will need to be switched by July 1, 2028.
Student loan repayment plans can be broken down into two types. The first are standard plans, similar to a mortgage, that are paid over a fixed period of time. The second are income-driven repayment plans, which include a calculation that incorporates income.
More than 13 million federally managed loans in repayment, forbearance or default are currently under income-driven repayment plans as of the end of 2024, according to data from FSA. That’s nearly 39% of the U.S. loan portfolio.
Of the borrowers on income-driven plans, the majority — almost 79% — are under those plans that will be terminated by July 1, 2028.
The remaining 21% of those borrowers are on income-based plans that are not going away.
"This is a big deal because the vast majority of borrowers in income-driven plans right now are not in those plans. They're in the plans that are being closed,” said Jessica Thompson, senior vice president at .
Advocates warn that the changes made in the One Big Beautiful Bill Act make a confusing situation even more confusing for borrowers.
"If it sounds confusing, it's because it is confusing, right?" said Aissa Canchola Bañez, policy director at the .
"I think what's challenging here is that this bill makes an already very complicated system even more complicated for folks who are really struggling right now," Bañez said.
For the 7.8 million borrowers on the SAVE plan with interest resuming Aug. 1, a choice will need to be made sooner. With Trump’s One Big Beautiful Bill Act signed into law and SAVE borrowers accruing interest, any person who switches from SAVE to an income-contingent repayment plan will end up having to switch again.
"It's unfortunately more complicated than it should be, and I think it's going to create a lot of confusion," said Thompson. "And this is why we're super concerned about a default crisis, just, you know, amassing."
Borrowers who try to switch plans may be stuck waiting. In June, the backlog of applications for income-driven repayment plans hit , according to the National Association of Student Financial Aid.
Nearly 60% of loan recipients on income-driven plans were on the SAVE plan, according to the most recent data from FSA. FSA does not publish data on SAVE recipients by state, but does publish the number of income-driven repayment plan recipients by state.
Here's where they are located:
With the changes made to federal student loans, more students may start taking out private student loans or choosing not to attend college, advocates say.
"I think we are going to see paying for college get more expensive and more risky, particularly for lower-income families and families that do not come from significant means," Bañez said.
People who borrow starting July 1, 2026, will also have a new wave of rules, including access to just two repayment plans: a revised standard plan and one income-based repayment plan. These repayment plan changes are in addition to new loan caps, the termination of the direct PLUS loans for graduate and professional students and changes to which plans parents with a PLUS loan qualify for.
