‘Frustration, anger, confusion’: Trump administration leaves millions without clear path to paying off student loans

Many Americans with student debt are again facing future upheaval after a federal appeals court recently ordered the end of a Biden-era student loan repayment program, known as the Saving on a Value Education (Save) Plan, a move that coincided with another grim revelation: new education department data shows that by the end of 2025, 7.7 million borrowers had defaulted on $181bn in federal student loans.
The Save plan, which was launched in 2023, is an income-driven repayment program created with the goal of cutting undergraduate loans in half, bringing some borrowers’ monthly payments to $0, and offering early forgiveness for low-balance borrowers. Shortly after the program was announced, Republican attorneys general across the country sued to get it killed, arguing that it was an overstep of executive power and imposed heavy taxpayer costs.
The ruling to eliminate Save serves as the final nail in the coffin for borrowers and advocacy groups who have been following the legal limbo for years. Nicholas Kent, the undersecretary of education, said in a statement earlier this month that the department would “issue clear guidance on next steps for borrowers enrolled in the illegal Save Plan, including details regarding how borrowers can move into a legal repayment plan” in the coming weeks.
And on Thursday, the Trump administration announced plans to shift that student loan portfolio to the treasury department as it continues its efforts to fully dismantle the education department. Linda McMahon, the education secretary, claims that student aid will be better managed at the treasury and that students would receive “the high-quality service they have come to expect under the Trump administration”.
For the millions affected by the court’s decision to eliminate Save and the Trump administration’s internal shuffling on who handles what when it comes to student loans, it’s objectively daunting for new borrowers to figure out how to start paying off their loans – or determine how to recover if they haven’t been able to pay them.
Experts like Rachel Gittleman, president of the American Federation of Government Employees Local 252, which represents more than 2,000 current and former education department workers, told the New York Times that the changes within the administration have “sown chaos for states and grantees”.
“This isn’t efficiency,” Gittleman told the paper. “Secretary McMahon is creating confusion, eroding public trust and harming students and families.”
Robert Farrington, founder of the College Investor, a website that provides news and analysis on student loan debt and personal finance, told the Guardian that he doesn’t see what’s left of the education department being “active on social media, hiring influencers, getting the message to the borrowers and families that might have been lost in the system”.
Michele Zampini, associate vice-president of federal policy and advocacy at the Institute for College Access & Success (TICAS), emphasized “there’s just a lot of frustration, a lot of anger, confusion and disengagement”.
“There’s a lot of people that feel like ‘I’m trying to do all the right things, and I still don’t have any direction,’” she said.
Without clear guidance, experts stress that borrowers will need to take matters into their own hands to make sure they are on the path to paying off their loans.
“It sounds really basic, but let’s log in [to StudentAid.gov] and see what you have. What do you owe? Who’s your loan servicer? Have you set up your loan servicer’s account? Do you know what repayment plan you’re on?” Farrington suggests to borrowers who don’t know where to begin.
Mark Kantrowitz, author and financial aid expert, said that “[borrowers] should track everything”.
“The number of qualifying payments they’ve made, their employment, their loan balances,” he noted.
The education department used to have a tool that would allow borrowers to track their loan payment progress, but it removed the payment tracking tool in April 2025. The department has said they do not plan to bring it back.
For borrowers currently on the Save plan, they will need to switch into a different repayment plan. While no definitive timeline has been announced as to when those in the Save plan need to switch, Kantrowitz recommends changing payment plans immediately.
Current borrowers have access to multiple Income Driven Repayment (IDR) plans, including Income-Based Repayment (IBR), Pay as you Earn (PAYE), and Income Contingent Repayment (ICR) plans. PAYE and ICR, however, will be phased out by June 2028.
The Trump administration is also introducing a new plan, the Repayment Assistance Plan (RAP), which will become available to borrowers in July 2026.
RAP differs from other IDR plans by changing how monthly payments are calculated from a borrower’s income, as well as increasing the minimum monthly repayment to $10 a month, while payments on an IBR plan could be as low as zero. The RAP plan also adds monthly subsidies to pay down principal and unpaid interest, and increases the number of payments required to receive forgiveness to 30 years.
New borrowers taking out loans on or after 1 July 2026 will only have access to RAP or the standard repayment plan, which requires fixed, monthly payments from borrowers of at least $50.
Kantrowitz says that Save borrowers shouldn’t wait for the RAP plan to take effect, and instead should switch to IBR as soon as they can. Though, Farrington added that there is no one-size-fits all solution here, acknowledging that both plans have pros and cons, depending on personal income and family size.
Zampini echoed Farrington, saying that the plan you choose should be dependent on personal circumstances.
“It really is an individual decision,” she said. One thing that all experts agree on, though, is that knowledge is power.
“It’s important that people do all they can to at least know where they stand,” Zampini said.