---
title: "Trump’s New Student-Loan Plan Is Simpler, and It Costs the Typical Borrower $2,163 More"
description: "A Center for American Progress report says borrowers moving from SAVE to RAP face much bigger bills, with less room to pause them"
author: "Nate Ledger"
published: 2026-10-19T13:00:01Z
modified: 2026-10-19T16:56:16Z
url: https://rews.cc/a/trump-s-new-student-loan-plan-is-simpler-and-it-costs-the-ty-9d2768
language: en
tags: ["education", "economy", "trump", "inflation", "debt", "us"]
publisher: "Rews (https://rews.cc)"
---

# Trump’s New Student-Loan Plan Is Simpler, and It Costs the Typical Borrower $2,163 More

*A Center for American Progress report says borrowers moving from SAVE to RAP face much bigger bills, with less room to pause them*

By Nate Ledger · October 19, 2026 · https://rews.cc/a/trump-s-new-student-loan-plan-is-simpler-and-it-costs-the-ty-9d2768

## In brief

- A Center for American Progress report estimates SAVE borrowers moving to RAP will pay $2,163 more a year on average
- A typical bachelor’s-degree holder earning $68,615 would see monthly payments rise from $136 to $343, per CAP
- RAP sets a $10 minimum payment; a single $35,000 earner would owe $88 a month instead of $0 under SAVE
- Hardship and unemployment deferments end next year; 9.3 million borrowers are already in default
- New parent PLUS borrowers face a $65,000 lifetime cap; the Education Department says the changes curb unmanageable debt

An income-driven repayment plan for student loans is a fairly simple deal. You borrow money to go to school. The government then tells you that whatever you owe, your monthly bill will be some fraction of what you earn, and after enough years it will forgive whatever is left. Every income-driven plan works like that. The only real questions are how big the fraction is, which measure of income it applies to, and how many years you have to keep paying. Change those three dials and you have changed a lot of people’s monthly budgets.

The Biden-era SAVE plan set all three dials in the borrower’s favor, and it is going away. The courts went after it first, with a federal [appeals court ordering an end](https://rews.cc/a/u-s-appeals-court-orders-end-of-save-student-loan-repayment--207744) to the plan, and then President Donald Trump’s “big beautiful” spending law replaced the whole menu. That law’s student-loan changes took effect July 1. They include new income-driven plans and borrowing caps, and the administration is pushing SAVE borrowers toward the new Repayment Assistance Plan, or RAP. On Monday the Center for American Progress, a left-leaning think tank, put a price on that move. CAP gave its report exclusively to [Ayelet Sheffey at Business Insider](https://www.businessinsider.com/student-loan-borrowers-parents-surging-monthly-payments-debt-relief-bills-2026-10). Its estimate is that a borrower going from SAVE to RAP would pay $2,163 more a year on average.

Here is how the dials moved. SAVE calculated payments from discretionary income, meaning only the income left over above a protected threshold. RAP charges [between 1% and 10% of a borrower’s total adjusted gross income](https://edtrust.org/blog/how-the-repayment-assistance-plan-rap-works/) from the prior tax year, according to an explainer from EdTrust. Borrowers get $50 a month off for each dependent. Forgiveness comes after 360 months of on-time payments over at least 30 years, except under Public Service Loan Forgiveness, which still takes 10 years. In plain terms, the fraction now applies to more of your income and the payments go on for longer.

![A three-dimensional pie chart with a separated slice topped by a navy graduation cap with a coral tassel, against a yellow background.](https://rews.cc/img/c54063bbc1d32ae64ec3e6b3c614159ca3d202ce.webp)

CAP’s main example is a typical bachelor’s-degree holder earning about $68,615 a year. That borrower’s monthly payment would go from $136 to $343, an increase of $207 a month, or about $2,484 over twelve months, which is the report’s $2,482 annual figure once you allow for rounding. The new bill is roughly two and a half times the old one. It also equals almost exactly 6% of that $68,615 salary divided by 12, which shows how directly RAP works: take a slice of gross pay and that’s the bill. CAP built its estimates from Census Bureau income data in the American Community Survey and the Survey of Income and Program Participation, adjusted for inflation using the consumer price index, and then applied each plan’s rules to typical borrowers in different educational situations.

The change is biggest at the bottom of the income scale. SAVE let the lowest earners pay $0 a month. RAP has a $10 minimum. According to CAP, a single borrower with no dependents earning $35,000 in 2026 would owe nothing under SAVE and $88 a month under RAP, which comes to $1,056 a year that wasn’t due before.

“Those $0 payments were a really important protection that many borrowers will struggle without,” Sara Partridge, CAP’s associate director of higher education and a coauthor of the report, told Business Insider. She said the timing makes it worse, since the changes arrive “at a time when there is high inflation, stagnating wages, and people are generally feeling financially strained.”

![A cream-colored bag cinched with a yellow belt holds papers and a rolled diploma tied with yellow ribbon against a bright blue background.](https://rews.cc/img/eb618c71d622467920ecb9cd56ee4170d687e6fe.webp)

RAP does offer something real in return. When your payment doesn’t cover the interest accruing that month, the unpaid interest is waived, so your balance doesn’t balloon the way it could under older plans. The catch is that you only get the waiver if you pay on time, with no grace period. I think this is the interesting design choice. The subsidy goes to borrowers who never miss a payment, and borrowers who never miss a payment are generally the ones in the least trouble. A borrower who misses a month, presumably because things got tight, loses the benefit in exactly the month it would have mattered most.

Missing payments is also about to get easier. Beginning next year, the overhaul takes away every borrower’s ability to defer payments because of economic hardship or unemployment. “This is a tool that borrowers relied on to help them out during times when they were struggling,” Partridge said. “And without those options, borrowers may be more likely to become delinquent on their loans or eventually default, which we know can come with some devastating consequences.”

Those consequences are concrete. A federal student loan typically goes into default after 270 days without payment, and then the government can garnish wages and seize federal benefits, including Social Security. The latest Federal Student Aid data shows 9.3 million borrowers already in default and 1.5 million more at risk of defaulting within six months. Put those together and you get 10.8 million people, before the deferment option disappears.

![A person holding a rolled diploma balances on a tightrope above a torn safety net against a bright blue background.](https://rews.cc/img/d763ccb40687319fb47fb115aaf2627f6b219596.webp)

Parents are getting squeezed too. Parent PLUS loans used to let parents borrow up to the full cost of attendance for their children. Parents who took out loans after July 1, 2026, now face a lifetime cap of $65,000. Those new parent borrowers can only use the costlier tiered standard repayment plan, and they lose access to the income-contingent repayment plan.

The administration says its aim is to simplify a complicated repayment system and to curb excessive borrowing. Nicholas Kent, the Education Department’s undersecretary, said the changes “will ensure students continue to have the access that they need for federal student loans, while helping prevent borrowers from taking on unmanageable debt levels that they may never be able to repay.” That argument carries some weight. A lifetime cap on parent borrowing is, more or less by definition, a way to stop people from taking on debt they can’t handle. It just does nothing for the people who already have the debt and are now being asked to pay more on it.

CAP’s numbers also fit with other estimates. The think tank’s [2024 analysis of the Project 2025 repayment plan](https://www.americanprogress.org/article/project-2025-would-increase-costs-block-debt-cancellation-for-student-loan-borrowers/), a similar design, estimated that typical borrowers would pay $1,822 more a year than under SAVE. A Student Debt Crisis Center survey [reported by Forbes](https://www.forbes.com/sites/adamminsky/2026/07/31/student-loan-payments-spike-by-500-as-borrowers-struggle-with-repayment-changes-says-report/) found that 51% of borrowers leaving SAVE expected their monthly payments to go up by $500 or more. Meanwhile, [CNBC warned in September](https://www.cnbc.com/2026/09/19/save-student-loan-deadline-avoid-higher-payments.html) that borrowers leaving SAVE could face much higher payments if they didn’t act soon, and the deadlines for doing so [have kept shifting](https://rews.cc/a/ninety-days-then-thirty-more-the-moving-deadline-of-america--0a1b12).

So the administration is right about one thing. The system is simpler now. For most Direct Loan borrowers there is basically one income-driven plan, it has a minimum payment, and the minimum is never zero.