WASHINGTON, D.C.—Before her student loan payments stopped in 2024, Leticia Harrison made $568 a month payment on about $50,000 she owed after getting her master’s degree in social work. She could afford that payment.
Now she’s waiting to see what the next one will be.
Ms. Harrison was enrolled in the Saving on a Valuable Education (SAVE) plan. When a federal court blocked SAVE, it put her and millions of other borrowers into forbearance, pausing their required payments. Her loan servicer contacted her in September, giving her until December to choose another plan.
“I’m expecting my bill to go up and the scary thing is I don’t know how much,” Ms. Harrison told The Final Call. “I was on a great repayment plan that was affordable, but now I’m expecting the worst.”
One option is the new Repayment Assistance Plan, or RAP. “I looked at RAP, but it would cost me more,” she said. Instead, she is looking at Income-Based Repayment (IBR).
A report released Oct. 19 by the Center for American Progress (CAP) explains why: Borrowers who switch from SAVE to RAP would, on average, pay more. Black borrowers and women will see some of the largest increases.
Report authors Sara Partridge, Madison Weiss and Kavin Haldo warn that higher repayment costs could widen racial wealth gaps and make a college education less effective at helping people get ahead financially.
Payment pause ends SAVE began under President Joe Biden in 2023. Its payment formula protected income up to 225% of the federal poverty line. Republican-led states sued the plan, and a federal appeals court blocked it in 2024. Enrollees stopped making required payments, but interest started again on Aug. 1, 2025.
Congress also changed the repayment system with the One Big Beautiful Bill Act, the Republican tax-and-spending law President Donald Trump signed July 4, 2025.
It created RAP and phased out some older income-driven plans. Litigation pushed SAVE to an earlier end date. In a March 27 release, the Education Department said a court had approved its settlement with Missouri to end SAVE.
About 7.5 million people were enrolled in SAVE. Last July, ser-vicers began sending borrowers notices with individual deadlines (at least 90 days) and the option to choose another plan. Anyone who doesn’t will be automatically placed into Standard or the new Tiered Standard plan.
“The Trump Administration’s policy is simple: If you take out a loan, you have to pay it back,” Under Secretary of Education Nicholas Kent said in the March 27 release.
What higher payments
could mean CAP estimates that the average additional cost of moving from SAVE to RAP is $2,163 a year. Its numbers use median incomes. They don’t tell Ms. Harrison (or any individual borrower) exactly what the bill will be.
Over the full repayment period, those differences grow. Under RAP, Black borrowers would pay nearly twice as much as under SAVE. Increases for American Indian or Alaska Native borrowers come close to that level too.
Hispanic borrowers would pay about 1.8 times as much and White borrowers about 1.5 times as much. Women’s projected total is about 1.7 times SAVE, and men’s is 1.4 times.
CAP looked at race and gender separately; it did not provide separate estimates for Black women such as Ms. Harrison.
Under RAP, borrowers pay 1% to 10% of adjusted gross income. Each dependent reduces the monthly bill by $50 but cannot fall below $10.
SAVE excluded an initial portion of income based on the poverty line; RAP has no such protection. Forgiveness comes after 360 qualifying monthly payments (late payments could delay forgiveness), CAP says.
Education Department officials say RAP will be simpler and cheaper. Borrowers who make full payment on time waive unpaid monthly interest. If a payment reduces principal by less than $50, the department makes a matching principal payment up to $50. Those benefits don’t address CAP’s concern about what borrowers must find in their budgets each month.
For eligible borrowers with older loans, Income-Based Repayment (IBR) is still an option: payments are generally 10% of discretionary income, forgivable after 20 years of qualifying repayment, or 15% with forgiveness after 25 years; borrowing history determines which terms apply. A borrower cannot make more than the applicable 10-year Standard Repayment Plan amount (Ms. Harrison is weighing that choice).
New borrowers don’t have that choice either: loans made on or after July 1, 2026, can’t be IBRed and RAP will be their only income-driven plan. Money spent on higher loan payments isn’t money for rent or child care or savings.
CAP’s authors urge lawmakers to increase Pell Grants, campus aid, and support for colleges serving large numbers of low-income students.
Paying for a degree Parents have fewer choices too. Parent PLUS loans made on or after July 1, 2026, must be repaid under a Tiered Standard plan (repayment term determined by amount owed) rather than IBR (which has no income requirement).
CAP expects higher bills for the lowest-income families than under the previous income-contingent option. Parents with existing loans can still have income-driven repayment if they meet the consolidation enrollment and payment criteria.
Another change comes
next year Loans disbursed on or after July 1, 2027, will not qualify for unemployment or economic hardship deferments; general forbearance for those loans is limited to nine months over a 24-month period.
For students already financing graduate school, the law ends Grad PLUS lending for new borrowers. Graduate borrowing is generally capped at $20,500 per year and $100,000 aggregate. Qualifying professional students have higher limits: $50,000 annually and $200,000 aggregate.
Some continuing students are protected. Graduate students enrolled as of June 30, 2026, who received Direct Loan disbursement for that program before July 1, 2026, may keep borrowing under the old limits (including through Grad PLUS). That exception lasts for up to three academic years or the remaining expected time to complete the program, whichever is shorter.
Social work is one of the fields where students have borrowed above the lower annual cap. An Urban Institute analysis of 2019- 20 data found that 24% of social work master’s students and 29% of public health master’s students borrowed more than $20,500 a year. Students with similar costs may have to turn to private loans, which generally lack the full range of federal repayment protections.
A deadline for a decision
Borrowers can compare plans at StudentAid.gov and ask their servicer to explain a new payment calculation in writing. Ms. Harrison has until December to choose. She knows what she paid under SAVE. What she can afford next is the question.
“I may need to get another job to pay for it if it’s too much,” she said.
