The One Big Beautiful Bill Act Eliminates All Current IDR Plans for New Borrowers, Replacing Them With a Less Generous Program That No One Understands Yet

The One Big Beautiful Bill Act (signed July 4, 2025) eliminates IBR, PAYE, SAVE, and ICR for loans disbursed after July 1, 2026, replacing them with the Repayment Assistance Plan (RAP) which requires payments of 1-10% of AGI (not discretionary income) with only a $50/dependent reduction and a 30-year forgiveness timeline, while existing borrowers on discontinued plans must actively select a new plan by 2028 or be auto-moved to Standard Repayment. Why it matters: current IDR plans calculate payments on discretionary income (income minus 150-225% of the poverty line), so switching the calculation base to AGI dramatically increases monthly payments for low- and middle-income borrowers, so a borrower earning $40,000 who previously paid $0/month under SAVE could owe hundreds per month under RAP, so borrowers who do not understand the transition and fail to act by 2028 will be placed on Standard Repayment with even higher fixed payments, so the complexity of navigating four discontinued plans plus one new plan with different rules for different disbursement dates will cause mass confusion and delinquency. The structural root cause is that Congress used the reconciliation process to restructure the entire student loan repayment system through a budget bill, with no standalone hearings on the student loan provisions, and implementation guidance is still being developed months after enactment.