Student Loan Borrowers Face Uncertainty in 2026

Over 400 student-loan borrowers recently shared their repayment experiences, revealing a landscape of uncertainty as 2026 progresses. The survey results highlight a divide between those who have achieved debt relief and the majority who are concerned about future balances and payment affordability.

Key issues driving this anxiety include the potential elimination of the SAVE repayment plan, stricter eligibility for Public Service Loan Forgiveness (PSLF), and the resumption of collections on defaulted loans. With proposed legislative changes and court settlements on the horizon, millions of borrowers are preparing for higher monthly payments and stricter borrowing limits.

The SAVE (Saving on a Valuable Education) plan, established by former President Joe Biden, is facing an accelerated end. On December 9, the Department of Education announced a proposed settlement with the state of Missouri to officially terminate the plan. While a court has not yet approved the settlement, it would immediately stop new enrollments and move current borrowers to existing repayment plans.

Originally, the department intended to phase out SAVE by 2028, but the settlement pushes this timeline forward. This change is expected to impact approximately 7 million borrowers currently enrolled in the plan. Many survey respondents described SAVE as a financial "lifeline," expressing fears that they cannot afford the higher payments required by alternative plans.

One 60-year-old borrower enrolled in SAVE described the situation as preparing for "an astronomical bill." These changes are part of broader spending legislation introduced by the current administration, which also proposes eliminating existing income-driven repayment plans and replacing them with two less generous options.

Uncertainty extends to the Public Service Loan Forgiveness (PSLF) program, which forgives debt for government and nonprofit workers after 10 years of qualifying payments. According to the survey, over 60 respondents are currently pursuing PSLF, and the majority expressed concern about the program's future.

The current administration's Department of Education finalized a rule to limit PSLF eligibility following a March executive order. Set to take effect in July, the new rule excludes employers determined to have engaged in "illegal activities" that conflict with the administration's views. Respondents pursuing this forgiveness path described feeling like a "pawn" and being "held hostage" by the program's instability.

Despite these concerns, some borrowers reported successful outcomes. A portion of the surveyed borrowers stated they had achieved student-loan forgiveness or repaid their loans in full, though they remain in the minority.

The consequences of falling behind on payments are becoming more severe. Collections on defaulted student loans resumed in May 2025 after a five-year pause. Starting January 7, the Department of Education plans to notify approximately 1,000 borrowers in default that their wages will be garnished.

Currently, over 5 million borrowers are in default, a status typically triggered after 270 days of missed payments. Survey respondents in default reported feelings of depression and anxiety. Those who are not yet in default but are struggling to make payments fear that wage garnishment is imminent.

Borrowers also reported difficulties navigating the complex student-loan system. Common complaints included struggles to get help from loan servicers and confusion regarding the changing regulatory landscape.

Parent PLUS loans, which allow parents to borrow up to the full cost of attendance for their children, are also subject to new restrictions. The current administration's spending legislation proposes a $65,000 lifetime borrowing limit per dependent student.

Many Parent PLUS borrowers reported struggling with repayment long before these proposed changes. Some survey respondents described paying more than they originally borrowed years after their children graduated, with some admitting that taking out the loans was a "mistake."

As federal borrowing caps tighten, the survey suggests that more students may turn to the private lending market. Unlike federal loans, private student loans often carry higher interest rates and are not eligible for relief programs like PSLF.

Key concerns identified by borrowers include:

• Inability to afford monthly payments on new plans
• Uncertainty regarding PSLF eligibility
• Anticipation of wage garnishment
• Struggles with Parent PLUS loan repayment