Authored by Adam H. Douglas via The Epoch Times,
If you carry federal student loans, July 1, 2026, redrew your map. With last year's tax law changes taking effect on that date, the Saving on a Valuable Education (SAVE) plan was dismantled, and servicers began notifying millions of borrowers to pick a new repayment plan or have one picked for them.
The end of the SAVE plan could raise your student loan payments unless you act before your 90-day deadline. zimmytws/shutterstockFor borrowers over 50, and especially Parent Loans for Undergraduate Students (Parent PLUS) holders, the wrong move, or no move, can push payments up sharply at exactly the stage of life when income stops growing.
Here is what changed and what to do about it.
Quick Answer: The SAVE Plan Is Ending. What Should You Do?Starting July 1, servicers began sending SAVE borrowers notices giving them 90 days to choose a different repayment plan. For most older borrowers, the realistic choices are Income-Based Repayment (IBR), which is staying available for loans taken before July 2026, or the new Repayment Assistance Plan (RAP). If you do nothing inside your 90-day window, you will be placed automatically into a standard plan, which usually carries the highest monthly payment. Find your notice, date your deadline, and run your numbers at StudentAid.gov before the clock runs out.
The Details: What Changed on July 1The new rules split borrowers into two tracks.
One point worth knowing: Borrowers who enroll in automatic debit can now receive a temporary 1 percent interest rate reduction.
Choosing Between IBR and RAP After Age 50For a borrower near retirement, the comparison is monthly relief versus the finish line.
RAP can produce lower payments for some borrowers, includes an interest subsidy so on-time payers see their principal fall, and never exceeds 10 percent of adjusted gross income.
But its forgiveness horizon is 30 years; time in RAP does not count toward IBR forgiveness if you later switch, and its brackets are not indexed for inflation, so modest income bumps can raise payments.
IBR keeps the shorter 20-to-25-year forgiveness path, which matters if you already have a decade of qualifying payments banked. Run both through the Loan Simulator before deciding.
What Default Actually Costs After 50The reason to act is visible in the data.
The Federal Reserve Bank of New York reports that roughly 1 million borrowers defaulted in the last quarter of 2025, and another 2.6 million did so in the first quarter of 2026. The average newly defaulted borrower is nearly 40 years old and was not behind on these loans before the pandemic.
Credit scores for defaulted borrowers dropped 91 points on average, from 567 to 476.
For a younger worker, default is a setback. After 50, it is a direct threat to retirement income, because the federal government collects in ways no private lender can:
One nuance: Collections on defaulted loans are currently suspended, with no announced restart date, but defaults are still being reported to credit bureaus during the pause. Consider this a window to fix your situation.
If you are already in default, the two exits are rehabilitation, which requires nine on-time payments, and consolidation. Consider starting either now, while collections remain paused.
The Parent PLUS ProblemParent PLUS borrowers face the hardest news. Under the new rules, the loans are largely shut out of income-driven repayment and Public Service Loan Forgiveness unless the parent's loans were consolidated into a Direct Consolidation Loan that disbursed on or before June 30, 2026. That window has closed.
If you consolidated in time, protect what you secured: Stay enrolled, recertify on schedule, and know that ICR sunsets in 2028, so a transition is coming.
If you did not, your realistic path is a standard, graduated, or extended plan, which means building the payment into your retirement budget rather than hoping it shrinks. Either way, call your servicer, confirm which plans your loans qualify for, and ask about hardship options before missing a payment.
Your Next Five MovesYou will be placed automatically into a standard repayment plan once your 90-day window closes. Standard plans carry fixed payments that are typically the highest monthly amount charged, with no connection to your income and no path to forgiveness. For a borrower on a fixed retirement income, that payment shock is exactly what the notice period exists to prevent. Choosing a plan yourself, even imperfectly, almost always beats the default placement.
Can Social Security Really Be Garnished for Student Loans?Yes. Federal law allows an offset of up to 15 percent of Social Security benefits for defaulted federal student loans, and the protected monthly floor of $750 was set decades ago and never adjusted for inflation. Offsets, along with other collections on defaulted loans, are currently suspended without an announced restart date. That pause is an opportunity to cure a default through rehabilitation or consolidation before collections resume, not a reason to wait.
Is RAP or IBR Better for Someone Near Retirement?It depends on your history. If you have years of qualifying payments already banked, IBR's 20-to-25-year forgiveness timeline may be within reach, and switching to RAP would restart a 30-year clock that most borrowers over 50 will never, or barely, finish. If your payments under IBR would be unaffordable, RAP's income-based formula and interest subsidy may offer relief. Run both scenarios in the Loan Simulator and compare the monthly payment against the forgiveness date.
I Already Defaulted. Is It Too Late?No. With collections suspended, this is the best window you will get. Loan rehabilitation requires nine on-time, income-based payments and removes the default from your credit report. Consolidation out of default can work faster but leaves the default notation in place. Contact the Education Department's Default Resolution Group to start either one, and act before collections restart, because garnishment and benefit offsets become possible once they do.
The Epoch Times copyright © 2026. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
Tyler Durden Sat, 08/08/2026 - 16:20As expected, Iran is pressing hard to extract from Washington everything it can get - at a moment the Trump White House seems to be backing down from a heighted war over the Strait of Hormuz, given the serious risk of settling into a another years-long quagmire in the Middle East.
The US administration, including Treasury Secretary Scott Bessent, has appeared to back the Iran-Oman deal for the opening of the Strait, with President Trump and his officials having remained surprisingly quiet even as it has emerged that the deal outline is wholly favorable to Tehran's conditions.
For example, as we've detailed Iran announced Friday that under the 'finalized' Oman-Iran scheme and 'deal' for management of the Hormuz Strait that "enemy countries" (read: US and Israel) may only transit the waterway after lifting sanctions and paying compensation for the war. US and Israeli-linked ships are currently banned and will be fired upon, Iran has warned.
The White House stayed mum even after that, and didn't openly push back - nor did Trump fire off any angry Truth Social messages, but focused on some random domestic issues Friday. This even as there was a Friday story in Reuters saying that Washington even plans to lift the naval blockade of Iranian ports once the Oman deal is finalized:
"There is progress between Oman and Iran on the Strait, and we expect a deal soon," the official said. "Once the deal is announced to restore commercial shipping without impediments, the United States will lift the blockade of Iranian ports."
And now the Iranians are piling on the demands even more, with on Saturday the NY Times reporting on the country's top Iranian national security official's remarks. The security chief has laid out a list of demands and stern set of further conditions.
"Mohammad Bagher Zolghadr, the secretary of Iran’s Supreme National Security Council, issued a statement carried by state media laying out multiple requirements for reopening the strait," reports the Times.
"He called for the United States to lift its naval blockade and sanctions on Iran, withdraw the U.S. military from around Iran, pay war reparations and release frozen Iranian assets, as well as end attacks on Iran's allies in the region and threats against the country,"
While other Iranian officials have voiced similar demands, this could represent the ascendancy of the Islamic Republic's so-called hardline faction within the context of the Oman negotiations. Zolghadr stated "These are the demands of the Iranian people who have been shouting for it relentlessly in the squares and streets for one hundred and sixty days."
Iran state media has listed them out as follows (machine translation):
1. Never threaten Iran with any language or insult the sanctities of this nation.
2. End the war and aggression against Iran and its allies in Lebanon, Palestine, Yemen, and Iraq forever.
3. Lift the naval blockade and withdraw its military forces (naval and air) from around Iran.
4. Pay the damages of the two wars of aggression and imposition on Iran without any reduction or reduction.
5. Lift the cruel and illegal sanctions against the Iranian nation.
6. Unconditionally release the frozen and stolen assets of the Iranian people.
The NY Times says there's been no immediate response from the White House when it requested comment; however, it must be remembered that the US was slapping yet more sanctions on Iran within only the last several days.
While the dropping of sanctions seems realistic as part of a deal to end the war, getting the Trump administration to agree to pay compensation for the many billions of dollars in damage done is a very tall ask. But the Iranians no doubt now smell weakness and blood in the water, as the US bombs have fallen silent for over a week at this point, and after Trump reversed course (more TACO) last weekend on the planned 'harder' strikes.
Bessent strongly suggested in an interview published Friday that the Hormuz Strait's reopening was imminent, delivered by a deal that would be finalized 'today or tomorrow'.
And yet, the Times underscores that:
Even before Mr. Zolghadr’s statement, Iranian officials had hinted on Saturday that the reopening of the strait was not imminent. Hossein Mohebbi, a spokesman for Iran’s Islamic Revolutionary Guards Corps, said that reopening the strait was “not contingent on the Iran-Oman negotiations.”
Iran is in essence saying this ain't over & wants to extract its pound of flesh, also to ensure it is never attacked again...
Trump is not going to be able to walk away from his Iran war at his own choosing. He still has no idea the world of shit he’s in, unfortunately we’re all in. https://t.co/Gdd4FTpIDW
— Mark Ames (@MarkAmesExiled) August 8, 2026Additionally, on Saturday Iran's army spokesman Amir Akraminia has been quoted by Al Jazeera as saying Iran's new protocols in the Strait of Hormuz are "irreversible" and shall not be thwarted by the US. "The United States has no choice but to accept the existing situation; otherwise, it will incur costs far greater than those it has faced in the past," Akraminia said.
In perhaps a good cop, bad cop approach to Washington, Iranian President Masoud Pezeshkian has meanwhile issued a more balanced, less maximalist statement. He expressed that "the war must end at some point, and that his country is determined to adopt the memorandum of understanding as a basis, provided the US abandons the atmosphere of distrust it has created."
Tyler Durden Sat, 08/08/2026 - 15:45