June 30, 2026
The One Big Beautiful Bill Act is changing the way millions of people pay for college and manage student loans – including borrowers with loans in repayment. Here’s what credit union leaders should know to stay on top of member needs during this turbulent time.
A quick overview of what’s going on
More than 7 million federal student loan borrowers were enrolled in the Saving on a Valuable Education (SAVE) plan, a Biden-era income-driven repayment program that offered the lowest monthly payments of any federal option. As of July 1, 2026, SAVE is no more, and borrowers must choose a new repayment program.
Loan servicers have been sending notices informing borrowers that they have 90 days to find a different plan – otherwise they may be automatically reassigned. For borrowers who don’t anticipate taking out new student loans, they have several federal repayment plans to choose from. For borrowers who will take out new loans in the future, there are fewer options. Either way, the end of SAVE means higher monthly payments for just about everybody.
What’s more is that many federal repayment options can come with complications and fine print – for example, the PAYE plan was closed, then it was reopened last year, but it will be eliminated in 2028, but if you switch now you can stay on it indefinitely, but if you take out a new loan you can’t, and if you want to switch there may be delays due to backlogs. It’s enough to make anybody’s head spin.
As of publication, only around 400,000 SAVE borrowers have switched to a new plan.
How borrowers are feeling right now
Federal loan programs have been on a rollercoaster over the past few years, and borrowers have been riding the ups and downs. SAVE ending is just another stop on a long journey full of shifting rules, changing administrative priorities, new court rulings, and sudden deadlines. It’s hard to keep up.
Adding to the confusion are reports that federal loan platforms are performing inconsistently, providing incorrect payment estimates, omitting repayment options, and providing misleading messaging, as borrowers attempt to find a new plan to replace SAVE.
Borrowers are understandably frustrated and confused, and the stats don’t paint a pretty picture. A record number of federal student loan borrowers are behind on their payments, with the Treasury reporting that almost 25% of borrowers are in default.
What credit unions can do to help
We’ve covered a few basic tips that credit unions can tackle right now, and there are additional considerations for refinancing:
- Make sure your staff are trained on student loan issues.
Are your front-line staff able to answer questions about RAP vs. IBR vs. refinancing? Even brief training on the OBBBA changes will differentiate your institution. - Consider targeted campaigns to your members who have student loans.
Our team can help you identify those members who are making recurring ACH payments to student lenders, and therefore the most likely to need information on refinancing. - Lead with support rather than product solutions.
Private student loan refinancing isn’t right for everyone, and it’s important to provide all information so borrowers can make the right choice for them. Our guide to student loan refinancing is a great place to start. - Keep a long-term view of the situation.
Follow up after the 90-day deadline. Borrowers with new higher monthly payments may want to re-evaluate their options. Plus, with the way federal student loans have been trending, who knows what changes may be in store for borrowers in the future.
The bottom line
The federal student loan system hasn’t seen disruption like this in a generation. Millions of borrowers are confused, under-served and running out of time. Credit unions that show up with clear information, competitive rates, and competent member service will earn loan share and lasting loyalty.
Need help developing your student loan strategy? LendKey partners with credit unions and community banks to launch, scale and optimize student loan refinancing programs – from applications to compliance to servicing and more. Talk to LendKey about your student loan strategy today.