A proposed overhaul of the student loan system could mean higher monthly payments for borrowers with families.

Student loan borrowers are automatically put into the standard repayment plan, which gives them 10 years to pay off their loans in equal payments. To lower their payments, borrowers can apply for an extended standard plan, or one of three active income-driven repayment plans: Income-Based Repayment (IBR), Pay As You Earn (PAYE), and Income-Contingent Repayment (ICR).

If a proposal currently working its way through Congress is passed, however, borrowers who take out or consolidate loans after July 1, 2026, would have fewer options. The bill proposes reducing income-driven repayment plans to one option, known as the “Repayment Assistance Plan” (RAP). It would also change how the standard repayment plan is administered.

Repayment choices are different for each borrower based on their circumstances. However, according to an Investopedia analysis, many borrowers with families would pay more every month under the proposed RAP than under the current income-driven options.

The Average New Single Borrower Would Likely Have Cheaper Payments

Since the two proposed repayment plans would likely impact new borrowers who graduate college after July 1, 2026, Investopedia estimated the payment amounts under the new and existing repayment plans for the average, recently graduated borrower.

A recent graduate with a Bachelor’s degree would make about $68,400 a year, according to a recent survey by ZipRecruiter. The average borrower enrolled in an income-driven repayment plan holds $58,328 in federal student loans, and if they took out loans in the 2025-26 school year, they’d have an interest rate of 6.39%.

If the bill is adopted, new borrowers will automatically be placed in the proposed standard plan, which is less expensive on a monthly basis for the average borrower than the current standard plan. The proposed standard plan reduces monthly payments by giving borrowers more time to pay their loans off, extending some repayment periods to 15 to 25 years, depending on the loan amount.

The average borrower could also qualify for RAP, the proposed income-driven plan. According to calculations by Investopedia, monthly payments would be $40 cheaper under RAP for the average borrower compared to their least expensive existing repayment plans, IBR or PAYE.

The Average New Borrower With a Family Would Likely Have Higher Payments

For the average recent graduate who is married, files their taxes separately and has a child, the new income-driven repayment would mean higher monthly payments.

Current income-driven repayment plans help lower the payments for many families by using a percentage of their discretionary income, which adjusts a borrower’s income after paying for taxes and necessities.

The proposed RAP plan allows borrowers with families to subtract $50 a month from their payments for each child. However, advocates say the plan’s calculation method, which uses a percentage of a borrower’s adjusted gross income (AGI), could increase payments for many, including those borrowers with lower incomes.

According to calculations by Investopedia, the average borrower with a family could pay about $45 more each month compared to the borrower’s least expensive existing repayment plans, IBR or PAYE.