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Student loan borrowers have spent much of 2025 trying to keep up with massive changes to the federal student loan system. That includes changes to repayment plans and borrowing limits. NPR's Cory Turner has this update on where we've been and where we're headed.
CORY TURNER, BYLINE: Even student loan experts found the past year a little dizzying.
PERSIS YU: Let's see. Where to start (laughter)?
TURNER: Persis Yu, with the liberal advocacy group Protect Borrowers, suggests starting with the latest news, the death of President Biden's Saving on a Valuable Education plan, or SAVE plan.
YU: SAVE was the most affordable, generous and flexible plan for millions of student loan borrowers.
TURNER: But it was so affordable, generous and flexible that Republicans sued. The courts froze SAVE. And this month, the Trump administration reached a proposed agreement to officially shut it down.
BETSY MAYOTTE: People that made other financial decisions based on what they thought their payment was going to be on the SAVE plan, they're in trouble.
TURNER: Betsy Mayotte is founder of The Institute of Student Loan Advisors and says the roughly 7 million borrowers still in SAVE have been on a roller coaster.
MAYOTTE: In the history of student loans, a payment plan has never been challenged in court and has never been pulled out from existing borrowers.
TURNER: Now, Mayotte says, those SAVE borrowers will have to change plans and find a way to afford what will likely be higher monthly payments. But even changing plans is about to get weird. SAVE isn't the only one going away. And starting in July, new borrowers will have just two plans to choose from. Next year's changes aren't just around repayment either. Up until now, graduate students could basically borrow as much money as they needed.
PRESTON COOPER: Colleges could simply raise the price, pass the cost onto students, and the federal government would be required to write a check through the federal student loan program.
TURNER: Preston Cooper studies student loan policy at the conservative American Enterprise Institute. He says Republican lawmakers were tired of that kind of blank check economy and passed strict new limits on grad school borrowing.
COOPER: I think that system was completely untenable, and I very much understand why Congress elected to end it.
TURNER: Cooper says, ideally, these limits will push some schools to lower their prices. Until they do, though, Persis Yu with Protect Borrowers says many students will face a serious funding gap between their federal loans and the actual cost of graduate school.
YU: Students are going to have to make up that gap with some other type of funding. And many students are going to have to turn to the private student loan market.
TURNER: Which leads us to one thing that Yu, Mayotte and Cooper all pretty much agree on.
YU: We are currently at, basically, the precipice of a default cliff.
MAYOTTE: I really do think we're headed for historic default rates.
COOPER: We've got about 12 million borrowers right now who are either delinquent on their loans or in default on their loans.
TURNER: That's more than 1 in 4 borrowers. And so heading into 2026, a big question hangs over the Trump administration and Republicans. Can all of these changes they've made help bring these borrowers back into good standing? Or will all of those defaults snowball into an avalanche?
Cory Turner, NPR News.
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