DC 37 MUNICIPAL EMPLOYEES LEGAL SERVICES

DC 37 members who are federal student loan borrowers, please be advised:

By way of the Trump Administration’s “One Big Beautiful Bill Act”, numerous changes are scheduled to be implemented on July 1, 2026.

• After July 1, 2026, traditional plans for repayment (non-income-based repayment plans) will be replaced with a new version of the “Standard” repayment plan.
  
• After July 1, 2026, Income Driven Repayment plans (IDRs) will be replaced with a new income driven repayment plan called Return to Affordable Payment (RAP).
  
• For student loan borrowers taking loans after June 30, 2026, the new Standard Plan and RAP will be the only options for repayment of student loans.

SAVE Borrowers with Loans at Present

1. The SAVE student loan repayment plan has been stricken down through the Courts. Borrowers who were on SAVE must select one of the remaining (until July 1, 2026) income-based repayment plans: ICR, IBR, PAYE. Failure to do so promptly will leave your loans accruing interest, at risk of default, and possibly with no alternative to the RAP plan.
   
2. Borrowers can apply on-line at www.StudentAid.gov and it is recommended to do so quickly.

Borrowers with Parent Plus Loans

1. Borrowers with Parent Plus loans who are currently in repayment on the Income Contingent Repayment (ICR) plan, and who have actually made a payment, can now apply for the Income Based Repayment (IBR) plan, which may result in a lower monthly payment. Previously, IBR was not available to Parent Plus loan borrowers.
   
2. Borrowers with Parent Plus loans who have not consolidated their loans and applied for the ICR plan should consider doing so immediately. This will preserve the ability to select the ICR plan, and then the IBR plan after one payment on ICR.
   
   • This will retain eligibility to have loan payments adjusted down, when there is a decrease in income, such as when a borrower has retired or had an income reduction for any other reasons.
     
   • This will retain eligibility for the Public Service Loan Forgiveness Program (PSLF).
     
   • After July 1, 2026, Parent Plus borrowers will have no access to either ICR or IBR. Repayment will have to be made on the new Standard plan, and the loans will not be eligible for Public Service Loan Forgiveness.
     
   • Again, for Parent Plus borrowers who have not consolidated and applied for the ICR repayment plan, consider doing so immediately. The fully processed consolidated loan must be fully processed before June 30, 2026. It can take many weeks for this process to be completed. Even pending consolidation applications which have not been processed by the US Department of Education will lose access to ICR and then IBR.

New Borrowers taking loans after June 30, 2026

First time borrowers taking loans after June 30, 2026, will only have access to the new Standard repayment plan or RAP. Repayment on RAP will leave loans eligible for PSLF going forward. (This is the present statement from the US Department of Education.)

1. First time Parent Plus Borrowers will ONLY have access to the new Standard repayment plan and Parent Plus loans will NOT be eligible for PSLF at all.

Borrowers with non-Parent Plus Loans Currently in Repayment which are NOT on an IDR plan

1. Borrowers with loans currently in repayment on traditional repayment plans (Standard; Graduated; Graduated Extended) who wish to retain access to any of the currently existing Income Driven Repayment plans, should make the application promptly. After June 30, 2026, there will be no opportunity to apply for anything but RAP, which may be more costly than the current options.

Borrowers With Loans Currently in Repayment Who Take Additional Loans AFTER June 30, 2026

1. Borrowers with loans currently in repayment on income driven repayment plans who take new loans or a new consolidation loan after June 30, 2026, will lose all access to ICR or IBR or PAYE, even if borrowers prior loans were already enrolled in any of those plans.
   
2. For borrowers with loans in repayment at present who have successfully consolidated and/and or applied for ICR, IBR or PAYE to meet the June 30, 2026, deadline, taking any new loans after June 30, 2026, will dis-enroll the current loans from ICR and IBR and PAYE. Borrowers will have to select from only new-Standard and RAP.
   
3. Parent Plus borrowers on ICR or IBR prior to June 30, 2026, who take additional federal student loans of any sort after June 30, 2026, will lose the option of Public Service loan forgiveness. The prior loans will be dis-enrolled from the ICR and/or IBR plans, the possibility of PSLF will be forfeited, regardless of the number of payments made toward PSLF, and the loans will have to be repaid on the new Standard repayment plan.

For members in need of assistance with their federal student loans, call the DC 37 MELS Screening and Intake Unit to speak with an attorney: (212) 815-1111.