Navigating Student Loan Changes: What Borrowers Need To Know
- Mar 25
- 8 min read
Updated: 3 days ago
UPDATED APRIL 6, 2026 1:00 PM ET
The news surrounding the student loan landscape is constantly shifting, and new changes can be hard to understand. We have heard from borrowers across the country who share the same concern: what can I do now? We will outline actions and suggested next steps for borrowers in different situations to better understand their options and manage their student loans.
Note: We are currently following the news regarding the transfer of the student loan portfolio to the U.S. Department of the Treasury. We will provide updates once we have received more information.
Table of Contents:
If You Are Enrolled In The SAVE Plan
Note: We are following the news and developments surrounding the SAVE plan and will update this section accordingly. This information is updated and correct as of the date written at the top of this blog post.
Developing: In December of 2025, the Department of Education announced that it had reached a settlement with Missouri to bring an end to the Saving On A Valuable Education (SAVE) plan, once approved by a judge. On February 27th, 2026, a court dismissed the settlement that would have ended the SAVE plan, leaving it in place and allowing borrowers to benefit from it. Missouri immediately appealed this decision, but a judge doubled down, keeping SAVE in existence. However, on March 9th, 2026, the Eighth Circuit court reversed the dismissal of the settlement, effectively ending the plan.
Some borrowers have already started receiving notifications from Federal Student Aid that they will receive further instructions from their loan servicer later this summer. Starting July 1, 2026, borrowers in the SAVE plan will be notified that they have 90 days to apply for a different plan or be placed into the Standard Repayment plan.
With all of this in mind, borrowers enrolled in SAVE may want to:
Begin to explore other repayment options for the eventual end of SAVE. There are a variety of Income-Driven Repayment (IDR) plans that are available to borrowers.
While not everyone qualifies for all repayment plans, you can use the Loan Simulator at https://studentaid.gov/loan-simulator or call your loan servicer and ask what plans you qualify for and what your estimated monthly payments would be.
Another helpful tool is the EDCAP NY Repayment Plan calculator, which provides reasonably accurate estimates of your monthly payments but does not verify which repayment plans you qualify for.
You do not have to consolidate your loans to exit the SAVE Plan.
We are hearing instances where loan servicers are telling borrowers this. This is incorrect.
If you benefit from not having to make a monthly payment while in the SAVE forbearance, you may want to consider staying in SAVE until you receive a notice to do otherwise.
If you choose to do this, we recommend exploring your options, so you have an idea of what you’ll be paying once you enter repayment.
Borrowers in the SAVE forbearance are still accruing interest.
If you want to continue to accrue PSLF or IDR credits, you may want to consider switching out of SAVE sooner rather than later.
According to the Department of Education, time spent in the SAVE forbearance will NOT count towards Public Service Loan Forgiveness credits. You would need to use the PSLF Buyback Program to buy back the months spent in the SAVE forbearance. These monthly payment amounts will not be based on what payments were under the SAVE plan. Instead, they will be based off of a different IDR plan like PAYE, ICR, or IBR.
IDR credits cannot be bought back.
Staying in SAVE or getting out of SAVE before you receive a notice is a personal decision. There is no right or wrong answer.
Borrowers In Default or Delinquency
Given recent developments surrounding the transfer of the student loan portfolio to the U.S. Department of the Treasury, if you are behind on your payments, you should explore your options immediately to get your account back into good standing.
We recognize that keeping up with student loan payments can be difficult. Borrowers are falling behind on their student loans at rates we have not seen before. If you are delinquent on your student loans or have entered default, there are ways to bring your loans back into good standing.
Check whether you are in default.
If you are behind on your student loan payments and unsure whether you are in default, log on to studentaid.gov. If there is a red banner at the top of your dashboard, then you may have a loan or multiple loans in default.
If you can’t log in to your account, call the Default Resolution Group to see if you have any loans in default.
You should also be receiving communications from the Department of Education, your loan servicer, or a default servicer once you enter default.
Contact the Default Resolution Group Immediately
Call (800) 621-3115 to see how you can get your loans back into good standing. They will also be able to verify if your loans were sent to a default servicer and who that servicer is.
You can also contact them online; calling is recommended.
If you have not been transferred to a default servicer, call your student loan servicer, ask for a retroactive forbearance to be applied, and apply for an IDR plan.
Explore Loan Rehabilitation
Loan rehabilitation is an agreement to make nine consecutive payments over a span of 10 months of a negotiated amount to get your account back into good standing. Upon completion, the delinquency status may be removed from your credit report. This is a one-time opportunity.
Explore Loan Consolidation
You can consolidate your loans into a single direct loan creating a new loan with a new payoff date. This may erase previous PSLF or IDR credits and add interest or collections costs to the principal balance. You can consolidate a single loan or multiple loans, but you cannot consolidate an existing Direct Consolidation loan on its own.
There are risks associated with consolidation. Please weigh the pros and cons before deciding how to get your loans out of default.
NOTE: Due to current regs, if you consolidate right now, you may erase your repayment history by creating a “new loan”. This may extend your “payoff” date and reset your IDR credits at 0.
Parent Plus Loans Holders
With the looming student loan system overhaul, repayment options for Parent Plus Loan borrowers could change drastically and become more expensive. To retain access to income-driven repayment plans, Parent Plus loan holders who have NOT YET CONSOLIDATED their loans must take action.
Apply for a loan consolidation.
Parent Plus Loan borrowers who would like to enroll their unconsolidated loans in an IDR plan must apply to consolidate & have the loan issued before July 1, 2026.
Loan Consolidation can take three months to process, however, there is a huge processing backlog at the Department of Education, and it could take even longer. We recommend that borrowers with unconsolidated Parent Plus loans seeking to retain access to IDR plans apply for loan consolidation by April 1, 2026 to allow for enough time for the application to be processed and the loan to be issued.
If you miss the April 1, 2026 date, that is okay! Submit your loan consolidation application as soon as possible.
Parent Plus borrowers who choose not to consolidate will maintain access to the current version of the Standard plan and the Fixed “alternative” plans.
If Parent Plus borrowers consolidate their loans and have the loan issued on or after July 1, they will lose access to all existing options and can repay their loans only under the new Standard plan. No income-driven repayment option will be available, resulting in higher monthly payments.
There are risks associated with consolidation. Please weigh the pros and cons before deciding how to get your loans out of default.
NOTE: Due to current regs, if you consolidate right now, you may erase your repayment history by creating a “new loan”. This may extend your “payoff” date and reset your IDR credits at 0.
Borrowers Working Towards Public Service Loan Forgiveness (PSLF)
The Department of Education announced a final rule that changes employer eligibility for borrowers working towards Public Service Loan Forgiveness. These changes target certain groups and organizations involved with, but not limited to, providing or collaborating on gender-affirming care; Diversity, Equity, and Inclusion (DEI) policies; and serving immigrant populations, including those in sanctuary cities or states. While the rule is set to take effect on July 1, 2026, it is currently being held up in court by three ongoing lawsuits looking to vacate the rule, which may delay its implementation. In the meantime, this is what borrowers working towards PSLF can do:
Screenshot, print, save, and document any current PSLF credits that are displayed on your studentaid.gov dashboard.
This will help you in the event that there are any discrepancies or errors regarding your PSLF credit counts.
Recertify your employment sometime now and before July 1, 2026.
We recommend that you recertify your employment now and again around May/June 2026 to ensure you have the most up-to-date PSLF credit counts in the event your employer is deemed ineligible.
Should your employer be deemed ineligible for PSLF, you will receive a notice, and your past PSLF credits should remain intact. After your employer is deemed ineligible, you would no longer accrue new PSLF credits.
Borrowers Enrolled In Income Contingent Repayment (ICR) and Pay As You Earn (PAYE)
The ICR and PAYE Income-Driven Repayment (IDR) plans are set to be phased out by July 1, 2028, but it may be sooner. Borrowers enrolled in these plans should explore their options. These options are only available to borrowers with loans issued or consolidated before July 1, 2026.
Explore other repayment plan options.
Once these plans are phased out, the remaining IDR plan options will be the Income-Based Repayment (IBR) plan or the Repayment Assistance Plan (RAP).
A Note on RAP: RAP will be available starting July 1, 2026, but may result in higher monthly payments than other IDR plans and longer repayment terms. RAP bases monthly payment amounts on Adjusted Gross Income (AGI) instead of disposable income, and forgiveness is granted after 30 years’ worth of IDR credits. Parent Plus loans cannot access RAP.
Find estimated monthly payments by:
Using the loan simulator on https://studentaid.gov/loan-simulator, but the estimated monthly payments may not be accurate.
Using the EDCAP NY Repayment Plan Calculator Tool for a more accurate estimate of your monthly payment, but it will not verify what plans you qualify for. It does include calculations for RAP, unlike the loan simulator.
If You Are A New Borrower Or Plan On Taking Out Student Loans Post - July 2026
If you are planning to take out or consolidate loans on or after July 1, 2026, this is what you can do to prepare for upcoming changes.
Ensure you have access to your studentaid.gov account
Update contact information to your personal information, not your school’s. This is the main hub for all student loan program applications and information
Create an account with your student loan servicer.
This is where you will make your payments and ask questions pertaining to your student loan account.
You can find who your servicer is on studentaid.gov
Borrow only what you need.
Since the student loan repayment system will be more restrictive in the coming years with loan limits, expensive repayment plans, and less borrower protections, it is recommended that you seek alternative funding sources, such as grants and scholarships, before taking out loans.
Should you need to borrow money for school, only borrow the amount that you need. Federal student loans still have access to loan forgiveness pathways and more borrower protections than private student loans.
Understand the incoming changes.
Borrowers with loans taken on or after July 1, 2026 will only have access to the New Standard Repayment Plan and Repayment Assistance Plan (RAP).
These plans may offer longer repayment periods or more expensive monthly payments.
The repayment term for RAP is 30 years.
Parent Plus borrowers will not have access to RAP.
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About Student Debt Crisis Center
Student Debt Crisis Center is a national advocacy organization with nearly 2,000,000 supporters calling for fundamental reforms to student loan policies and an end to the student debt crisis. Learn more here.
