If you have federal student loan debt, here's what experts want you to know

If you're among the more than 43 million Americans who have federal student loan debt, significant changes are coming.

With the passage of President Donald Trump's signature One Big Beautiful Bill Act last summer, the repayment landscape will look substantially different for new borrowers starting July 1, more so than for existing borrowers who are grandfathered into older plans for two more years.

READ MORE: Major changes to student loan borrowing and repayment are coming. Here's what to know

But people who currently have federal student loan debt may see their repayment options disappear or be restructured, and holders of Parent PLUS loans especially need to carefully consider their options before further restrictions go into effect this summer, experts say.

Eventually, the changes will streamline the system and reduce the number of repayment options. But right now, trying to understand what's happening is a little like staring into a bowl of alphabet soup (except that soup is made of money).

Here's what people who have existing federal student loan debt need to know.

What will happen to your existing loans?

Regardless of what plan you're on, your current loans will remain exactly the same for the next two years, as long as you don't take out new loans or consolidate the ones you have. That does not necessarily mean you should do nothing for the next two years.

Borrowers on one of the standard plans, including the extended standard and graduated standard, will see no changes to repaying their loans until they're paid off, experts say.

WATCH: What the new student loan rules mean for current and future borrowers

Borrowers on income-driven repayment plans will have the same options available for two more years, according to Betsy Mayotte, founder of The Institute of Student Loan Advisors. After July 1, 2028, only two income-driven repayment plans will be available: one that currently exists, the Income-Based Repayment (IBR) plan, and a new one, the Repayment Assistance Plan (RAP).

Borrowers on other existing income-driven repayment plans will need to choose between IBR and RAP (or a standard plan). Those affected plans include:

• Pay As You Earn (PAYE)
• Income-Contingent Repayment (ICR)
• Saving on a Valuable Education (SAVE)

If a borrower doesn't make a choice, they'll be automatically enrolled in one of the two available plans based on eligibility.

How are the two income-driven repayment plans different?

The existing Income-Based Repayment plan currently offers loan forgiveness at either 20 or 25 years of on-time payments.

The new Repayment Assistance Plan will require 30 years of payments before loans are forgiven, but has other benefits, experts say, including federal interest subsidies, dependent deductions and monthly federal contributions to help pay down your balance.

"I think that if you are a much older borrower, you're closer to that 20- or 25-year mark for forgiveness, you're probably going to be better off choosing the Income-Based Repayment plan because you'll have fewer years to pay," said Preston Cooper, senior fellow at the American Enterprise Institute.

But for more recent borrowers, who are just beginning to repay their loans and may have lower incomes at the start of their careers, Cooper said, "You're probably going to be better off with RAP because you really want to take advantage of those those interest waivers to limit how much your balance is going to balloon in the early years."

How would existing borrowers lose their grandfathered status?

If you make any modifications to your current debt, such as consolidating or taking out a new loan, that's when things start to change.

Any borrowers who take out new loans will be treated as "new" borrowers, and all of their loans — whether new or existing — will fall under the new repayment system.

However, graduate borrowers will still be grandfathered into existing loan caps for the remainder of their program, or for three years, whichever is less, Mayotte said.

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Confused yet? That's part of the reasoning behind the consolidation of plans, according to Cooper. He noted that, going forward, new borrowers have only two options: the standard plan and Repayment Assistance Plan.

"That's a very clear choice, but unfortunately in order to get there we have to have some complications because we have a huge maze of repayment plans right now that we need to somehow pare down to just two," Cooper said.

What if you're a Parent PLUS borrower?

Parent PLUS borrowers have an important deadline approaching much sooner. After July 1, 2026, Parent PLUS loan holders will only have access to the standard repayment plan.

Previously, Parent PLUS borrowers could use a loophole to access income-driven repayment plans after consolidating their loans twice. That loophole will close after July 1 this year.

That means if you currently have a Parent PLUS loan, you need to act now if you want an income-driven repayment plan. Here's what Winston Berkman-Breen, legal director at Protect Borrowers, advises those who want to switch:

• You will need to consolidate once to become eligible for Income-Contingent Repayment (ICR) and make at least one qualifying payment under that plan.
• Then you may be able to transfer into the Income-Based Repayment (IBR) plan, which often has more generous terms for borrowers.
• According to the OBBBA, if you're still in ICR by the time it sunsets, you'll automatically be enrolled in IBR. Berkman-Breen said he does not recommend anyone wait to be automatically moved.

"It's not when you apply for the consolidation, it's when it goes through. So you could apply today and if there's a crazy backlog and they don't get to you until after July 1, then you no longer have access to all of this and you only have access to the new plans," said Berkman-Breen.

What if you're enrolled in SAVE?

SAVE was an ambitious plan created under President Joe Biden's administration to give student loan holders an incredibly lenient, income-driven repayment plan.

The plan required lower monthly payments than other income-driven repayment plans and subsidized unpaid interest, as long as borrowers made payments on time. It also would have forgiven undergraduate loans after 20 years and graduate loans after 25 years.

WATCH: What the end of a Biden-era student loan program means for borrowers

Republican state attorneys general, spearheaded by Missouri, challenged SAVE in federal court, and the Trump administration settled the suit last December.

Now, SAVE borrowers are in student loan limbo while a court considers the proposed settlement to end the plan.

If you're on SAVE, you're not required to make monthly payments, but your loans are still accruing interest. And if you're not making the required payments that will allow you to qualify for forgiveness under an income-driven repayment plan or the Public Service Loan Forgiveness (PSLF) program, "you're just spinning your wheels," Mayotte said.

"You're losing time and there's no way to get that time back. So the quicker you can move over to another income-driven plan, the quicker you'll start accruing the payments needed to get forgiveness," she said.

But there are circumstances where people might want to stay on SAVE, she added. It gives borrowers more flexibility to choose where their money is going, including to other types of debt with higher interest rates, since no student loan payments are actually due right now.

"I've run into some borrowers that are like, 'Listen, I have some medical debt' or 'I have some high-interest credit card debt that I need to bang out before I start paying on my (student) loan, so I'm gonna hang out in the SAVE forbearance as long as I can,'" Mayotte said.

What's Public Service Loan Forgiveness (PSLF) buyback, and should I do it?

The buyback program allows a borrower enrolled in PSLF to pay a lump sum totaling what the Department of Education estimates the person would have paid during the period of "ineligible deferment or forbearance," such as payments not made while SAVE was tied up in court.

The borrower must have been working for an employer that qualifies for PSLF during those months and is only eligible if buying back the remaining months finishes the borrower's required 120 months of payment.

"Buyback is you saying, 'Hey listen, I was in forbearance in all of 2024, and if I'd known that I could have used an income-driven plan and had a payment of X, and had that count towards PSLF, I would've done that instead. So why don't you let me know what I would have paid under an income-driven plan, based on my income in 2024, and I'll pay you all of that in a lump sum all at once, and you make that count," Mayotte said.

If you've been putting off paying loans in forbearance and your income is substantially more this year than last year, you may want to consider buyback so the Education Department calculates what you owe based on your lower income, she said.

But, she also added, buyback requests can now take a long time — up to a year, in some cases — to be accepted.

Borrowers enrolled in PSLF might also wonder what's happening with the Trump administration's proposal to disallow organizations that it says "have a substantial illegal purpose" from counting as eligible employers.

But the matter isn't settled yet. Protect Borrowers is participating in lawsuits alleging that Education Secretary Linda McMahon doesn't have the authority to make those rule changes, and Berkman-Breen argues that Congress would have to amend the law governing PSLF to give the secretary that power.

"The whole thing is unlawful, pretty much on its face, and pretty shocking in terms of how it's trying to weaponize a debt relief program that Congress created to punish folks who are adverse to their administrative agenda," Berkman-Breen said.

What should all borrowers be doing now?

All borrowers should use tax season as a reminder to check on their student loans and repayment plans, Mayotte said.

"I think everybody should be reevaluating their student loan strategy every year at tax time, because things change," she said. "Income changes, bills change, financial priorities change … whether you're working for a PSLF employer or not may have changed."

Beyond the Department of Education, there are organizations where borrowers can find help. At least two states, New York and California, have invested in one-on-one student loan counseling, Berkman-Breen said. Mayotte's TISLA also helps thousands of borrowers a year.

In particular, if borrowers need to make changes, "now is the time to check back in," ahead of the looming July 1 deadline, said Berkman-Breen.

That's especially "a now or never kind of situation" if you need to make structural changes or consolidate your loans, he said. "If there's an influx of people who are trying to consolidate this spring, that could draw out the process and people could see delays and then miss that deadline."