ByAdam S. Minsky,
Senior Contributor.
The Department of Education updated key guidance this month to reflect an anticipated timeline for changes to a critical federal student loan repayment plan. According to the new guidance, a major fix to a popular income-driven plan is expected to happen in December 2025, potentially allowing more federal student loans to enroll by then.
Income-Based Repayment, or IBR, is the only current income-driven repayment plan program that will be preserved under the One Big, Beautiful Bill Act (or “OBBBA”) that congressional Republicans and President Donald Trump enacted earlier this summer. Three other IDR plans including Income-Contingent Repayment, Pay As Earn, and the Saving on a Valuable Education plan will be phased out. ICR and PAYE will remain in place until 2028, while the phaseout of SAVE (which has been blocked since last year due to a legal challenge) could happen on a faster timeline depending on an anticipated court ruling or settlement next year. The OBBBA also creates a new income-driven plan called the Repayment Assistance Plan, or RAP. But RAP would have a 30-year repayment term before a borrower can qualify for student loan forgiveness, compared to 20- or 25-years under current plans.
