Over the past six years, the federal student loan program has been substantially altered by pandemic and policy changes, disrupting payments and creating confusion for borrowers. These changes include regulatory and statutory reforms that have dramatically altered student loan access, repayment, and forgiveness options for borrowers. As these policy changes phase out and phase in, researchers, advocates, and policymakers should consider and study these effects and other possible reforms that might be necessary.

Why This Matters

Recent reforms have substantially changed the federal student loan landscape. Moving forward, higher education programs will have to meet new earnings standards to be eligible to disburse federal loans, and students will have new limits on how much they can borrow and new terms for repaying their loans, all while borrowers continue to transition back into repayment after the pause. These changes will affect students, institutions, and lenders, and will necessitate research to inform future policy decisions.

Key Takeaways

• New loan limits for graduate and Parent PLUS borrowers will require researchers and policymakers to examine how student enrollment patterns and private borrowing respond.
• The introduction of the Repayment Assistance Plan (RAP) and changes to the standard repayment plan for student loans could substantially alter loan repayment choices and subsequent repayment outcomes. Researchers and policymakers should monitor rates of RAP take-up, delinquency, and default, particularly for low-income borrowers.
• As the federal student loan program sees a wave of defaults after the end of the payment pause, researchers should follow borrower paths in and out of default to understand what pushes borrowers to return to good standing and how borrowers fare in repayment after exiting default. Researchers should also evaluate effects of default prevention strategies.

How We Did It

We convened a bipartisan working group of student loan policy experts, including researchers from think tanks and advocacy organizations, academic researchers, legal professionals, and current and former staff members from the US Department of Education and Congress. The working group was intended to facilitate coordination among researchers, advocates, and policymakers on the possible effects of recent student loan reforms, potential future reforms, and policy questions in need of further evidence and analysis.