Phase out existing income-driven repayment plans
What the document says“The Secretary should phase out all existing IDR plans by making new loans (including consolidation loans) ineligible”
The chapter proposes a single replacement plan with an income exemption equal to the poverty line and payments of 10 percent of income above it. It says that if new legislation is possible there should be no loan forgiveness at all, but that without it existing law would require forgiving any remaining balance after 25 years.
What the document actually says“The Secretary should phase out all existing IDR plans by making new loans (including consolidation loans) ineligible”
Close the current payment plans to new loans. Let them run out.
Some plans set payments by what a borrower earns. The book says these should be closed to new loans. One new plan would replace them.
To provide for reconciliation pursuant to title II of H. Con. Res. 14
2025-07-04 · 139 Stat. 72
Section 82001 does what the proposal asks and by the means it names. For loans made on or after July 1, 2026 the Secretary may offer only a standard plan and the new Repayment Assistance Plan, and may not offer, carry out or change any other plan for such a loan. A consolidation loan offered on or after that date may be repaid only under those two. The income contingent repayment authority in section 455(e) of the Higher Education Act of 1965 is repealed, and every borrower repaying under an income contingent plan must move to another plan before July 1, 2028. Three things differ. It was done by statute rather than by the Secretary, as the chapter proposed. The replacement is not the chapter's design: payments run on a band from $120 a year at incomes of $10,000 or less up to 10 percent of adjusted gross income above $100,000, rather than 10 percent of income above the poverty line, and the balance is canceled after 360 payments, where the chapter would prefer no forgiveness at all. And income based repayment under section 493C survives, rewritten at 15 percent of income above 150 percent of the poverty line, so not every income driven plan is gone.
The 2025 law ends most income based repayment plans for new student loans. From July 1, 2026 only a standard plan and a new aid plan may be offered. Old plans must be left by July 1, 2028. But Congress did this, not the Secretary, and one income based plan lives on.