This summer, Congress passed the One Big Beautiful Bill Act (OBBBA). IBR Rule Change Delayed By Technical Issues One of the most talked-about parts of the bill was that it got rid of the “partial financial hardship” requirement for federal student loan borrowers who wanted to join the Income-Based Repayment (IBR) Plan. On July 4, 2025, the change that makes more people eligible for one of the most popular income-driven repayment programmes became law. However, it has not yet taken effect. IBR Rule Change Delayed By Technical Issues
The U.S. Department of Education said on October 10, 2025, that technical updates are still being made to loan servicing systems. The department says that the updates should be done “in winter 2025”. Until then, loan servicers will keep applications that would have been approved under the new rules and process them as soon as the systems are ready.
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That means that thousands of borrowers who might now qualify for IBR without showing financial hardship (or who have certain consolidated Parent PLUS loans) are waiting to take advantage of the change. IBR Rule Change Delayed By Technical Issues
What’s Changing For Borrowers
Before OBBBA, borrowers could only enter the IBR Plan if they could prove a partial financial hardship – a technical term meaning their required payment under the standard 10-year repayment plan was higher than what they would pay under IBR.
OBBBA eliminates that restriction. Once implemented, borrowers will be able to choose IBR regardless of income level. This could be important for borrowers leaving the SAVE repayment plan but wanting to maintain PSLF eligibility. IBR Rule Change Delayed By Technical Issues
The law also opens the door for certain Parent PLUS borrowers to access IBR for the first time – specifically, those who have consolidated their Parent PLUS loans into a Direct Consolidation Loan.
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For most borrowers, payment calculations under IBR remain unchanged:
- Those who borrowed before July 1, 2014, pay 15% of discretionary income with a 25-year repayment term.
- Those who borrowed on or after that date (or had no outstanding balance before then) pay 10% of discretionary income over 20 years. IBR Rule Change Delayed By Technical Issues
And while the hardship requirement is going away, OBBBA does not alter one key protection: no borrower’s payment under IBR can ever exceed what they would pay under the standard 10-year repayment plan.
Why The Delay?
In its guidance, the Education Department emphasised that the delay is not a matter of policy disagreement but a technical one. Updating the federal loan servicing systems (managed by multiple contractors) requires reconfiguring how borrower eligibility and payment caps are calculated. IBR Rule Change Delayed By Technical Issues
“We anticipate that the system changes will be completed in winter 2025,” the department said in an FAQ. Until then, applications from borrowers who would qualify only under the new rules “will be held” by servicers rather than denied outright. Once updates are complete, servicers will process those pending applications automatically.
That means borrowers don’t need to reapply once the systems are updated. However, those looking to consolidate Parent PLUS loans or make timing-based moves should act early, as the department is also phasing out several other income-driven repayment plans.
Deadlines And Options
OBBBA sets a series of deadlines for accessing repayment plans that are being restructured or phased out. Borrowers with existing federal loans made before July 1, 2026, will still be able to enrol in IBR forever. However, enrolment in Income-Contingent Repayment (ICR) or Pay As You Earn (PAYE) will likely end in late 2027. IBR Rule Change Delayed By Technical Issues