Student loanMillions of people with federal student loans could soon see their monthly bills go up sharply because of a law called the One, Big Beautiful Bill Act, signed by former President Trump. A student borrower advocacy group says that for many borrowers, payments could rise by more than four hundred dollars each month.

Why payments are going up

Fewer repayment options

Federal student loan borrowers have long relied on income-driven repayment (IDR) plans. These plans set payments based on a person’s income and family size, helping keep monthly bills affordable. Under the new law, most of these plans will be taken away by 2028. This includes the Income-Contingent Repayment (ICR), Pay As You Earn (PAYE), and the Saving on a Valuable Education (SAVE) plan. Some of them could even end earlier.

When these plans end, borrowers will have just two options left. The first is the older Income-Based Repayment plan, which will remain. The second is a new program called the Repayment Assistance Plan, or RAP. RAP may reduce interest costs for some borrowers, but it also stretches repayment out for up to thirty years. That means people could stay in debt much longer than before.

What this means for Borrowers

For people currently enrolled in cheaper plans like SAVE, the shift to IBR or RAP will mean bigger payments. The borrower group analysis gave an example: a single person with a bachelor’s degree would pay about 473 dollars each month under IBR, compared to 188 dollars under SAVE. That is about 3,425 dollars more each year.

Effect on current borrowers

Those who are already using ICR, PAYE, or SAVE will not be forced off right away, but these plans are officially ending by 2028. Borrowers on the SAVE plan have already seen interest begin accruing again this summer, so their balances may grow faster unless they switch to a different plan.

More details about repayment options are available on the Federal Student Aid website at studentaid.gov/manage-loans/repayment/plans.

Effect on New Borrowers After 2026

Anyone who takes out a new federal student loan after July 1, 2026, or who consolidates existing loans after that date, will not be able to use IBR. Their only income-based option will be RAP.

For some borrowers RAP might feel more manageable than IBR, but it can be much more expensive than older plans. For example, a borrower with a family of four would see payments of about 435 dollars a month on RAP, compared to just 33 dollars under SAVE. That adds up to 4,824 dollars more per year.

The government’s loan simulator tool at studentaid.gov/loan-simulator can help borrowers calculate their potential payments.

Effect on Parent PLUS borrowers

Parents who borrow under the Parent PLUS program are likely to have the hardest time with these changes. Those who consolidate their loans before July 1, 2026, may still be able to access IBR. But after that date, Parent PLUS borrowers will lose access to all income-driven plans, since both ICR and PAYE will be eliminated and RAP will not apply to them.

That means their only option going forward would be the Standard Repayment Plan, which requires higher fixed payments. In one analysis, a typical Parent PLUS borrower would pay 250 dollars each month under the Standard Plan, compared to 131 dollars under ICR. That is an increase of about 1,427 dollars each year.

Guidance for Parent PLUS loans can be found at studentaid.gov/plus-app/parent/landing.

When the Changes Happen

Not everyone will be affected immediately. Some key dates to know include:

• Summer 2024: New borrowers and those who consolidate loans will begin to have fewer repayment choices.
• August 2024: Borrowers on SAVE will see interest added back to their loans.
• July 2026: Final chance for Parent PLUS borrowers to consolidate loans in order to access income-driven plans.
• July 2028: Full ending of ICR, PAYE, and SAVE under the law.

Borrowers can track updates on the Department of Education announcements page at studentaid.gov/announcements-events.

Bottom Line

The One, Big Beautiful Bill Act is reshaping how student loans are repaid. While it aims to simplify repayment by reducing the number of plans, many borrowers will face higher monthly costs and longer repayment timelines. For families already stretched thin, the changes could make paying for college even more expensive

READ MORE: Studentaid gov debtrelief – Complete Guide to Student Loan Forgiveness in the USA