The U.S. Department of Education has released detailed guidance explaining how the One Big Beautiful Bill Act, signed by President Donald Trump on 4 July 2025, will reshape federal student-loan repayment. Three of the four existing income-driven plans—ICR, PAYE and SAVE—will be eliminated by 1 July 2028, while the remaining IBR plan will lose its partial-financial-hardship test but retain a cap tied to the 10-year standard payment. Current borrowers may keep IBR if they avoid taking new federal loans after 1 July 2026. Parent PLUS borrowers who want income-driven terms must consolidate and enter ICR before mid-2028, then transition to IBR after making at least one ICR payment. Separately, the department told Sen. Elizabeth Warren that it will shift an undisclosed share of loans serviced by the Missouri Higher Education Loan Authority (MOHELA)—including some Public Service Loan Forgiveness accounts—to other contractors such as Nelnet, Aidvantage or EdFinancial by year-end. The move follows complaints over servicing errors and a $7.2 million payment withholding last year. Officials said borrowers will receive advance notice and warned them to save payment records to avoid inaccuracies that have plagued past transfers. The agency is also preparing to restart collection activities paused since 2020, with wage-garnishment notices for defaulted borrowers expected later this summer. Up to 15% of disposable pay can be withheld, although workers must be left with at least $217.50 a week. Consumer advocates urge the roughly 5.3 million borrowers in default to contact the Education Department’s Default Resolution Group now to explore rehabilitation or enrollment in an income-driven plan before garnishments begin.