Repayment hell: The student loan mistake that balloons monthly payment
Even though Congress made big changes to U.S.student loan programs in 2025 with the One Big Beautiful Bill Act (OBBBA), one perk of federally subsidized student loans that remains is the possibility of enrolling into a repayment plan that keeps your payments manageable and could offer forgiveness after a few decades.If you haven’t borrowed money yet, or if you haven’t consolidated your loans into a legacy Income-Driven Repayment plan (IDR), you only have one option: the Repayment Assistance Plan (RAP).If you have already enrolled in Income-Based Repayment (IBR), you’re in luck! This plan will never exceed what you would owe on the standard 10-year plan, no matter how high your income gets.
And it’s the only legacy plan that will survive past 2028. If you are currently enrolled in PAYE or REPAYE, and you haven’t taken out any new loans or consolidated any old loans since July 1, 2026, you have to transfer to IBR before July 1, 2028 or your loan provider will transfer you to the program of their choice.To use income-based repayment plans, you must recertify your enrollment annually.While it’s a relatively simple process, you’ll have to provide updated information about your income and family size every year.Both the new RAP plan and the older IDR plan cap your payment at a percentage of discretionary income.
After you make payments for 20, 25 or 30 years (again, depending on the plan), you can apply to get the remaining balance of your loan forgiven.All income-based repayment plans require borrowers to update their income and family status yearly with the Department of Education, which is called “income-driven recertification.” Recertification not only keeps you in an income-based repayment plan, but it also determines how much you have to pay per month. If you don’t recertify your income as required, you could face significant consequences: You could be removed from the plan, your monthly payment could increase and any unpaid interest could be...