Name: Millions of student loan borrowers face New repayment rules
Uploaded: 2026-01-13T17:17:44.059Z
Duration: 2 min 53 s
Description: After a five-year pause, federal student loan wage garnishments are resuming, with 15% of borrowers’ paychecks at risk. The early end of the SAVE plan and new repayment rules in 2026 will mean higher bills for millions. Borrowers are urged to check tax refund offsets, explore income-driven plans, and prepare for taxes on forgiven loans.

After a five-year pause, federal student loan wage garnishments are resuming, with 15% of borrowers’ paychecks at risk. The early end of the SAVE plan and new repayment rules in 2026 will mean higher bills for millions. Borrowers are urged to check tax refund offsets, explore income-driven plans, and prepare for taxes on forgiven loans.

Student loan borrowers are experiencing significant changes as new federal rules take effect, including those introduced by the One Big Beautiful Bill Act. Many borrowers will soon receive higher bills, especially those transitioning from the SAVE plan, and face the possibility of tax refund seizures if they default.

The income-based repayment plan remains a key option as other changes roll out over the next few years. Additionally, loans forgiven in 2026 will be subject to taxation, prompting experts to advise borrowers to prepare for potentially larger tax bills in the future.

Millions of student loan borrowers face New repayment rules

There's been no shortage of changes for student loan borrowers under the Trump administration's overhaul of the Department of Education. And this year will bring even more. Because of a high number of borrowers in default and new rules under the One Big Beautiful Bill Act, borrowers will have to pay close attention to their accounts. 15% is a giant hit to one's income, especially when right now every dollar counts. There is the possibility that some of your tax refund could be held on to. It is much easier for the Department of Education to seize your tax refund than it is to sort of track down your employer and put a garnishment order in place. They're going to start getting student loan bills probably very soon. And those bills are almost certainly going to be higher than the bills they received when they were enrolled in the SAVE plan. The income-based repayment plan is probably the most important because that's the plan that's going to sort of survive even after a bunch of additional changes to the student loan system start going into effect starting this summer and over the next few years. I think the key advice for borrowers is sort of the ground is moving underneath you and we're going to keep seeing changes. With tax season in mind, there's a new rule for that too. Student loans that are forgiven in 2026 will be taxed. Now, that won't affect your 2025 tax bill that you'll pay in April, but it might be smart to set aside some extra money to prepare for a larger-than-normal tax bill this time next year. Maura Barrett, Scripps News Group, Denver.

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