If you have federal student debt, big changes went into effect this month, limiting how you can pay it back.
Celina Damian is California’s first, and only, Student Loan Servicing Ombudsperson. Even she’s having trouble parsing the new rules.
“The changes that are happening will affect a lot of borrowers, if not all of them, at some point. But it's not a one-size-fits-all plan,” Damian told KALW.
Going forward, people who have already taken on federal loans for education will be more limited in how they can repay them.
Borrowers who enrolled in the income-driven repayment plan SAVE, a now-defunct Biden-era program, will be automatically transferred to the standard plan beginning this month.
The Trump administration has introduced a new income-driven repayment plan, the Repayment Assistance Plan (RAP), though it has attracted criticism for locking borrowers into a 30-year repayment cycle. Two pre-existing income-driven repayment plans will be phased out by 2028, pushing more borrowers toward RAP.
Incoming college students and their families are also affected, as the new rules limit how much they can borrow overall. Damian says this particularly affects families who have multiple children entering, or attending, college at the same time.
New graduate students and people entering professional degree programs will also be limited in how much they can borrow, and ineligible for income-based repayment plans going forward. (Those currently enrolled in advanced degree programs will be grandfathered into pre-existing loan agreements.)
Damian told KALW that everyone with federal student debt should check on their loans to learn how they’ve been impacted.
“These life decisions, it could really bankrupt people,” Damian says. “So the frustration is real.”
Her office remains a resource for California borrowers trying to understand their options, though she adds: “I wish there was, like, ten of me.”
Have you been struggling with student debt? We’d like to hear from you. Email news@kalw.org to tell us about your experience navigating federal loan repayment – and put “student loan” in the subject line.
