On July 1, the U.S. Department of Education will implement changes under the One Big Beautiful Bill Act, affecting tens of thousands of federal student loan holders. The Trump administration's decision to terminate nearly half of the Education Department's staff has contributed to technical difficulties and misinformation surrounding the new repayment options.
Advocates, including Carolina Rodriguez from the Education Debt Consumer Assistance Program, have reported that many borrowers are unable to access the Pay As You Earn (PAYE) plan, which offers lower monthly payments compared to other plans. This could result in borrowers facing higher bills if they are unaware of their options.
Additionally, there are reports of incorrect payment estimates being provided to borrowers under the Income-Based Repayment (IBR) plan, leading to potential financial strain. Concerns have also been raised about borrowers being misinformed about the need to consolidate their loans, which could jeopardize their progress toward debt forgiveness.
With a backlog of applications and a looming deadline for nearly 7 million borrowers to transition from the SAVE plan, the situation is becoming increasingly urgent as the Education Department prepares for the implementation of these changes