Student Loan Changes

**Brian Lehrer** (0:10)
It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Well, there are big changes coming next month to student loans for new borrowers, people with current student loans, undergraduate and graduate student borrowers included, and parents and caregivers borrowing money to help their dependent children. These changes were part of last year's HR1, known to its supporters as the One Big Beautiful Bill Act. There are also lawsuits over some of the changes and claims that one consequence could be ending up with a health care provider shortage to walk us through these changes to programs.
And even their acronyms were joined by NPR education correspondent Cory Turner, who put together a handy guide to this at npr.org. Cory, thanks for some time for the WNYC audience. Yeah, welcome.
So you've broken your guide into categories. So let's go through some of them. What are the options for people who have taken loans and won't be taking more because they've graduated or finished their education? What's changing?

**Cory Turner** (1:15)
Yeah, I mean, the good news, bad news for current borrowers is that they're going to get to keep most of the current repayment options. So they actually have a lot of choices, a lot of plans to choose from, including several plans where your monthly payment is based on your income, which means the less you make, the lower your monthly payment.
Current borrowers will also be able to choose if they want, a new plan that was designed and created by Republicans as part of, as you mentioned, the One Big Beautiful Bill Act last year. It's called the Repayment Assistance Plan. So, lots of options for current borrowers, Brian.

**Brian Lehrer** (2:02)
And listeners, we can take your questions. If you want to know what this is going to mean for you or anybody you know or care about, 212-433-WNYC, 212-433-9692, call or text. One big category, I understand that some 7 million borrowers need to take action because they're enrolled in the repayment program offered under President Biden called SAVE. What's happening to SAVE?

**Cory Turner** (2:32)
Yeah. So, your listeners probably remember SAVE was the big income-based repayment plan that President Biden tried to create. And it was really generous in a sort of unprecedented way. It offered low-income borrowers a zero-dollar monthly payment. And monthly payments for everybody on SAVE were calculated based on a really small portion of their income. Ultimately, that plan got blown up at the courts. And then Republicans with the one big beautiful bill last year officially, legislatively voted to shut SAVE down. So, we know there are roughly 7 million borrowers who are still enrolled in SAVE.
They're having to pay interest on their loans now, and they're gonna need to change repayment plans. This is really important because they need to understand if they don't change plans on their own, if they don't make the choice, then after a certain amount of time, the Education Department is going to make that choice for them. And what we've heard is they will be automatically enrolled in what is essentially the least flexible or generous repayment plan. It's the standard repayment plan where the monthly payments are fixed and it does not really take your income into account. So if you want to be in a more flexible plan, if you're worried about whether or not you can make your monthly payments, it's best to make that choice yourself rather than wait for the department to make it for you. And as I said, for folks who are in the same plan, who are not going to take out new loans, all of their loans are sort of current or older loans, they have lots of options to choose from when it comes to repayment plans.

**Brian Lehrer** (4:27)
But they do need to be in touch with their loans. Yeah, so don't do nothing, because then the federal government is going to put you in a plan without your input. Can you go over some of the main plans on offer and how they're different from each other for people transitioning from SAVE?

**Cory Turner** (4:47)
Sure. So I tend to think of repayment plans in two families, basically, Brian. Like, there's the fixed payment family of plans that's pretty rigid, and it doesn't really matter your income. You're basically taking your debt and dividing up your monthly payments into the same monthly payment every month plus interest over a set number of years. So like the standard plan is 10 years and it just spreads your payments out equally across 10 years. Now, obviously, if you're not sure where you're going to be working next year, or you go through periods of time where you don't have enough income, you feel like to keep up with your payments, those plans are probably not right for you. Those plans are the standard plan, there's a graduated plan, there's an extended plan, but really all of them, if you're experiencing inconsistency in your income, you want to go to the other family of plans, which are all, essentially, they're called income driven repayment plans, and there are a bunch of them. It's confusing. There's an older one called income based repayment. That's probably going to be one of the best options for a lot of folks right now. It's known by its acronym IBR. There's another one, income contingent repayment. I mean, honestly, these acronyms are names, but they get a little mind boggling. But it's also important to remember a couple of them are also like saved. They're being sunsetted by 2028