Mass forgiveness is dead. The Big Beautiful Bill passed. These are the next battlegrounds for student loan borrowers

If you’ve followed the plot lines of this serial drama, you already know:

• America’s student loan debt ballooned alongside the cost of college.
• Mass loan forgiveness made it onto the presidential candidate debate stage.
• In place of that far-reaching relief, the Big Beautiful Bill will now reshape higher education financing altogether.

The question is, what comes next?

If you’re a student loan borrower who’s feeling uncertain about your options and your budget, you might be waiting for an answer with bated breath.

To find out where we go from here, Bankrate interviewed various experts, from lenders and academics to lawyers and activists. Based on our reporting, we’ll be watching three key battlegrounds:

1. The courts: Arguing over the rules of federal loan repayment 

Student loan legislation takes time and rarely comes to pass. That’s what makes the Big Beautiful Bill — a result of the budget reconciliation process that doesn’t require bipartisan support — and executive orders so powerful. But they aren’t immune to challenges.

Student Borrower Protection Center executive director Mike Pierce, for one, says it’s the role of organizations like his to fight tooth and nail when a unilateral missive lands with a thud. He cites the example of American Federation of Teachers (AFT) v. the Department of Education, which aimed to hold the federal government accountable for blocking access to income-driven repayment (IDR) and Public Service Loan Forgiveness (PSLF) progress. (As the Consumer Financial Protection Bureau’s student loan ombudsman told Bankrate in May, borrowers are “legally entitled” to these programs when repaying their federal loans.)

“As advocates, it is our job to be faithful to the experiences of the people we serve,” Pierce says. “That means suing the Trump Administration to protect the rights borrowers do have under federal law… and creating the conditions that allow for bigger changes.”

So, expect more court cases as the Big Beautiful Bill’s student loan repayment provisions and other Trump Administration policy reforms roll out. When the Education Department ends its negotiated rulemaking process and tightens eligibility criteria for PSLF later this year, more attorneys will surely get involved.

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Aside from the aforementioned PSLF, there are other federal loan frontiers just waiting to be adjudicated. Most of them relate to IDR:

• Access for borrowers wanting to switch plans: As part of the agreement between AFT and the federal government, the Education Department needed to furnish three monthly reports showing its progress in processing IDR applications, but it’s been slow-going: Only 4 percent were processed in April. It could be even more challenging once borrowers who are enrolled in the now-obsolete SAVE Plan are forced, likely, into Income-Based Repayment (IBR).
• Resumption of forgiveness under IBR: In July, the Education Department announced that it had suspended IBR relief but would bring it back once its “system” updates were completed. Given the other fits and starts of repayment plans and relief along the Trump Administration’s timeline, however, you can imagine borrowers’ lack of confidence.
• Return of the “tax bomb” on forgiveness: Left out of the Big Beautiful Bill, federal tax on IDR-related forgiveness could arrive by Jan. 1, 2026, if no legislative action is taken.

These and other challenges also beg the question of whether the Education Department will remain in charge, or whether the U.S. Treasury Department might manage federal student loans in the future.

2. The public square: Reimagining mass relief

Organizations like the Debt Collective remain steadfast in their goal of blanket cancellation of the country’s entire $1.6 trillion education debt. When borrowers are struggling, grassroots activists and nonprofits will spring into action, aiming to help.

But that help could emerge from new voices — respected student loan lawyer Stanley Tate is a prominent example. Tate has been pushing what he calls “Amnesty Day,” which would give distressed borrowers a five-year window to repay only their original principal, not interest or fees that have accumulated. He acknowledges the fairness concerns but believes it’s a more realistic version of mass relief.

“My hunch is this concept is more politically palatable to most Americans — except perhaps those who spout ‘pay back what you owe’ without considering the relief the government regularly provides to other groups,” Tate wrote to his email subscribers in July.

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Critics argue that amnesty is just forgiveness by another name and remains unfair. You must be familiar with the argument by now: “Why should my tax dollars go to forgiving someone else’s debt when I worked my tail off to repay my own?”

That debate underscores what Bankrate expert Denny Ceizyk has previously written: the conversation should probably focus on a borrower’s ability to repay their education debt, rather than whether their fellow citizens should do it for them. 

So, we could see more movement toward relief for borrowers that need it the most — such as making loan discharges easier during bankruptcy, for example. After all, if you’re willing to declare bankruptcy — and suffer the years-long consequences, including to your credit — it’s less likely you can afford to repay your student loans, and more likely you’re deserving of relief.

3. The private market: Student loan refinancing is due for a comeback

This may be less of a battleground and more of a surrender: The federal student loan safety net continues to shrink, making student loan refinancing increasingly attractive for a wide range of borrowers, including:

• Parent PLUS Loan-holders who don’t take advantage of the income-driven repayment loophole before July 1, 2026.
• Public servants who are wary of pursuing PSLF because they work in a politicized field or for a controversial cause.
• Borrowers who can access deferment and forbearance options with private lenders that are akin to those offered by Federal Student Aid, especially now that the Big Beautiful Bill axed economic hardship and unemployment deferments.
• Student debtors who are wary of pursuing years-in-the-making forgiveness, perhaps for fear the program could cease to exist or because of a sudden federal tax bomb that would cancel some of the long-term relief.

As Sara Parrish, the president of CampusDoor, a third-party loan origination platform, reminds us, refinancing is all about your interest rate. If you can’t lower a federal (or private) loan rate by consolidating with a private lender, what’s the point?

“So, with interest rates remaining steady, we are seeing a little less student loan refinance than we have in the past,” Parrish says.

But remember: Refinancing can be a viable option if you qualify for a rate lower than you’re already paying.

Travis Hornsby, the CEO of consultancy Student Loan Planner, wrote to his subscribers this month that demand for refinancing has surged, “as many folks lock in rates in the low 5 percent range instead of 6 percent to 9 percent on federal loans.”

At Bankrate, the best student loan refinancing lenders in August advertised APRs from 3.99 to 13.99 percent. Although federal rates saw a slight decline for the 2025-2026 school year, they remain much higher than they were before the pandemic. So, we could see more borrowers leaving campus with higher rates than they could get by refinancing with banks, credit unions, online lenders and state agencies.