A significant financial burden may soon hit student-loan borrowers according to a fresh analysis.

The Center for American Progress a left-leaning think tank issued a report on Monday detailing the effects of President Donald Trump's student-loan repayment changes on monthly bills and relief options for millions of borrowers. The think tank provided the report exclusively to Business Insider.

The updates enacted through Trump's major spending bill took effect on July 1 and introduced new income-driven repayment options along with borrowing limits. Borrowers shifting from the prior SAVE plan to the Repayment Assistance Plan or RAP may face average annual payment hikes of 2163 dollars the report indicated.

As an illustration the analysis noted that a typical borrower holding a bachelor's degree and earning around 68615 dollars per year could see monthly payments rise from 136 dollars to 343 dollars resulting in an average yearly increase of 2482 dollars.

These estimates draw from income figures in the US Census Bureau's American Community Survey and Survey of Income and Program Participation adjusted for inflation via the consumer price index. CAP calculated expected payments for representative borrowers under varying education levels using the specific rules of each plan.

The SAVE plan offered reduced payments and a faster path to forgiveness. The Trump administration ended that plan and directed borrowers toward alternatives such as RAP. While RAP waives unpaid interest each month borrowers must pay on time without any grace period to qualify for the benefit.

Sara Partridge associate director of higher education at CAP and report coauthor explained to Business Insider that SAVE permitted zero-dollar payments but RAP sets a minimum of 10 dollars. Those zero payments provided key safeguards that many borrowers will now lack she noted.

For instance the report showed a single borrower without dependents earning 35000 dollars in 2026 would owe nothing under SAVE yet would pay 88 dollars monthly under RAP.

Partridge observed that these shifts occur amid high inflation stagnant wages and widespread financial pressure making it harder for borrowers to absorb larger monthly obligations.

Parents and borrowers confront higher default risks

Trump's repayment revisions also restrict options for parents. The parent PLUS program previously permitted borrowing up to the full cost of attendance. Starting after July 1 2026 new parent borrowers face a lifetime cap of 65000 dollars and must use the more expensive tiered standard repayment plan losing access to income-contingent repayment.

In addition to higher bills the overhaul removes all borrowers' ability to defer payments during economic hardship or unemployment beginning next year.

This option served as a vital support for borrowers facing difficulties Partridge said. Without it borrowers face greater chances of delinquency or default which can bring severe consequences she added.

Default on federal student loans after 270 days of nonpayment can trigger wage garnishment and loss of federal benefits such as Social Security. Recent Federal Student Aid data indicated 9.3 million borrowers in default with another 1.5 million at risk within six months.

The Trump administration stated the reforms aim to simplify repayment and limit excessive borrowing.

Nicholas Kent the department's undersecretary noted in a statement that the updates will maintain necessary access to federal student loans while curbing unmanageable debt levels that borrowers may struggle to repay.