Trump's New Student Loan Rules: Who Pays More Now — trump…

The Trump administration has quietly rewritten the rules on federal student loan repayment, and millions of borrowers are about to find out the hard way that "simplified" doesn't mean "cheaper." Tucked inside the One Big Beautiful Bill Act passed last year, the changes phase out nearly every income-driven repayment plan that existed before—including the popular SAVE plan—and replace them with just two options. If you're one of the roughly 42 million Americans carrying federal student debt, here's what actually changes for your wallet. First, the good news, such as it is. The new standard plan stretches payments over 30 years instead of the old 10, which lowers the monthly bill. But here's the catch that's lighting up borrower forums: stretching payments means you'll pay thousands more in interest over the life of the loan. A $35,000 balance could cost you an extra $8,000 to $12,000 compared with the old 10-year plan, depending on your rate. The bigger shake-up is in income-driven repayment. The old REPAYE and PAYE plans are gone for new borrowers. What's left is a single income-based option with a higher payment formula—generally 10% to 15% of your discretionary income instead of the 5% some borrowers enjoyed under SAVE. The Department of Education estimates that the average borrower's monthly payment could rise by $150 to $200 under the new structure, though your actual number depends on income and family size. There's also a new forgiveness timeline. Instead of the patchwork of 20- and 25-year forgiveness periods, most borrowers now wait 30 years for balances to be wiped clean—and that forgiveness is no longer tax-free at the federal level starting in 2026. Yes, you read that right. Borrowers who reach forgiveness could owe income tax on the cancelled amount, which for a $50,000 balance could mean a five-figure tax bill in a single year. Public Service Loan Forgiveness survives, but with tighter certification requirements and a narrower definition of "qualifying employer." If you work for a nonprofit or government agency and were counting on PSLF, double-check your employer's status before you recertify. So what should you do right now? Log into StudentAid.gov and review which plan you're actually on—many borrowers were auto-enrolled into SAVE and don't realize it's being wound down. Run the loan simulator with your real numbers, not the old ones. If you have a low balance relative to your income, aggressively paying off under the standard plan may now beat chasing forgiveness. And if you're married, run the math both jointly and separately, because the new rules changed how spousal income counts. One more thing: the Education Department's processing backlog is real. Applications for the new plans are taking weeks longer than advertised, and servicers are still training on the updated formulas. Don't wait until your first higher bill arrives to figure out your options. The bottom line: these rules shift costs onto borrowers in exchange for a lower monthly number. For some, that's a fair trade. For most, it's a bill that comes due decades from now—right when you thought you were finally done paying. Run your numbers before the next payment hits, because nobody at the servicer is going to run them for you.