A promised negotiated rulemaking provides an important opportunity to restore important protections for people with federal student loans. Although the SAVE Plan (Saving on a Valuable Education) is ending, the Department of Education should consider restoring regulatory provisions that apply to all IDR plans that could dramatically improve repayment options for borrowers.
Background
In 2023, the U.S. Department of Education took critical steps to improve student loan repayment rules by issuing new income-driven repayment plan regulations. These changes addressed longstanding problems that contributed to one in five 5 federal student loan borrowers being in default and resulted in an increasing share of people entering retirement age with student loan debt. The rule created a significantly more affordable income-driven repayment (IDR) plan, called the SAVE plan. But, the rule also included regulatory provisions that would have implemented long-needed fixes to make it easier for borrowers to enroll and stay enrolled in all IDR plans, prevent borrowers from struggling with decades of debt, and eliminate hidden traps that ensnare people in debt for decades.
The SAVE plan was challenged in court by conservative state attorneys general in 2024, who decried the plan as an attempt at debt cancellation. In December 2025, the Department of Education agreed to end the SAVE plan and asked the court to vacate virtually all of the 2023 Rule, including most of the reforms that applied to the other IDR plans, even though those other provisions had not been challenged in the lawsuit. In its settlement agreement, the Department pledged to convene a negotiated rulemaking to consider formally repealing all or some of the 2023 Rule. In March 2026, the court complied with the Department’s request and ordered that most of the 2023 Rule be vacated.
Specific Improvements
As the Department looks ahead to the promised rulemaking, it should take the opportunity to restore the portions of the 2023 Rule that are unrelated to the SAVE plan and would improve repayment outcomes for student loan borrowers. Specifically, the Department should restore the following critical improvements to repayment from the 2023 Rule. More detail on each recommendation follows this list.
1. Allow automatic enrollment and re-enrollment in IDR.
The Department should ensure that borrowers who would benefit from IDR do not miss out on it by allowing automatic enrollment of borrowers into IDR if they miss more than two months of payments in more expensive plans. It should also allow automatic annual recertification of borrowers’ incomes, for borrowers who consent to data-sharing, to reduce the incidence of one of the most common barriers to staying enrolled in IDR plans.
This provision would modernize all of the IDR plans, reduce annual paperwork burdens, address the widespread problem of borrowers “falling out” of IDR plans based on
missed paperwork, and prevent borrowers from falling into default if they were eligible
for lower payments.
2. Allow borrowers in default to enroll in IDR.
The Department should allow defaulted borrowers to enroll in the Income-Based Repayment (IBR) and Repayment Assistance Plan (RAP) plan so that they can receive credit for payments made and receive forgiveness after 20 or 25 years of repayment.
Many borrowers who have been in default for years are low-income and would have been eligible for low- or $0-payments had they known about their eligibility for an IDR plan. Allowing borrowers in default to enroll in IDR prevents student loan debt from becoming a debt trap that follows borrowers to the grave.
3. Protect IDR credits when borrowers consolidate their loans.
The Department should credit consolidation loans with a weighted average of the IDR qualifying time earned on the loans prior to consolidating. It should permanently end the practice of wiping out the time borrowers earned towards IDR forgiveness when they consolidate.
Borrowers who consolidate often find themselves in repayment for decades longer than they would have been if they had not consolidated and often don’t realize that consolidation has this severe and unwarranted drawback.
4. Provide borrowers with a way to “buy back” periods of time in forbearances and deferments ineligible for IDR forgiveness.
Historically, servicers have steered borrowers into forbearances and deferments that didn’t count towards forgiveness and significantly extended their repayment. Allowing borrowers to “buy back” periods of ineligible time would ensure that borrowers wouldn’t be plagued for decades by prior misinformation.
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