Education Dept. publishes proposed rule for Trump’s student-loan overhaul

The Department of Education announced Thursday that it published the proposed rule for President Donald Trump’s student-loan repayment overhaul in the Federal Register, and said the public will have 30 days — until March 2 — to submit comments. Publishing the proposed rule is the next key step in the negotiated rulemaking process and moves the department closer to implementing the changes this summer.

The department began negotiations on the package after Trump signed the so-called “big beautiful” spending legislation into law. The proposal would create a new Repayment Assistance Plan that sets borrower payments at 1% to 10% of income and forgives any remaining balance after 30 years.

The department said this plan is less generous than the Biden-era SAVE plan, which allowed lower monthly payments and forgiveness after 10 years. The rule would also place new borrowing caps on graduate and professional degrees, eliminate the Grad PLUS program, and eliminate existing income-driven repayment plans.

The department announced a proposed settlement that, if approved, would accelerate the timeline for ending SAVE and require borrowers to switch to the new plan within a limited timeframe. Changes for borrowers in default would allow them to rehabilitate loans twice instead of once, by working with servicers on a payment plan that could remove default status from credit reports.

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