The Brief

Borrowers have spent much of 2025 trying to keep up with dizzying changes to the federal student loan system.

The Trump administration and Congress are in the process of overhauling everything from how much Americans can borrow to how quickly they have to pay it back.

Here's what to know as we head into a new year:

President Biden's SAVE Plan is ending

The U.S. Department of Education announced in early December that it had reached a proposed settlement agreement to end the popular, yet controversial Biden-era student loan repayment plan known as SAVE.

The Saving on a Valuable Education Plan "was the most affordable, generous and flexible plan for millions of student loan borrowers," says Persis Yu of the liberal advocacy group Protect Borrowers.

But it was so affordable, generous and flexible — with its fast-tracked loan forgiveness and monthly payments as low as $0 for low-income borrowers — that Republican state attorneys general sued the Biden administration for exceeding its authority.

Legal challenges put SAVE borrowers in limbo for months, during which they were not required to make payments on their loans. Interest began accruing in August.

This new agreement, pending court approval, would end the long legal battle by ending SAVE itself.

"The law is clear: if you take out a loan, you must pay it back," Under Secretary of Education Nicholas Kent said in a statement announcing the proposed agreement. "American taxpayers can now rest assured they will no longer be forced to serve as collateral for illegal and irresponsible student loan policies."

Under the agreement, the Education Department would commit to moving the roughly 7 million borrowers still enrolled in SAVE into other repayment plans — though some of those plans are also in flux.

Whether you blame Biden or Republicans for SAVE's downfall, Betsy Mayotte, founder of the Institute of Student Loan Advisors (TISLA), says it puts borrowers in a real bind.

"People that made other financial decisions based on what they thought their payment was gonna be on the SAVE plan — they're in trouble," Mayotte says. "A payment plan has never been challenged in court and has never been pulled out from existing borrowers."

Now, Mayotte says, those roughly 7 million SAVE borrowers will have to change plans and find a way to afford what will likely be higher monthly payments.

Complications for borrowers working toward Public Service Loan Forgiveness

Liz Kilty, an oncology nurse in Portland, Ore., has been on the SAVE plan from the start.

"As soon as SAVE was an option, I signed up for it," says Kilty, who works in a public hospital and wanted to keep her monthly payments reasonably low on her way toward Public Service Loan Forgiveness (PSLF).

Since 2007, PSLF has offered a path for borrowers who work in public service — including teaching, nursing and policing — to have their loan balances erased after 10 years on the job.

Kilty has $36,000 in debt remaining, and 15 payments to go before she can qualify for loan forgiveness.

But SAVE's legal troubles have slowed her down: Since her payments were frozen, so too was any progress she could make toward forgiveness. "I was like, 'Are you kidding me?' Like, 'This is the year I'm going to be done, and this is the year that they're going to screw things up?' I've been waiting a decade [for forgiveness] and now things could go awry, and you're just helpless."

Earlier this month, Kilty applied for the PSLF Buyback, to make her remaining 15 payments in one lump sum and finally qualify to have the remainder forgiven.

One reason PSLF is still an option for Kilty and other borrowers is because it was created by Congress.

The Trump administration doesn't have the authority to stop PSLF — but it has worked to change the rules. Effective July 1, 2026, the department says it will deny loan forgiveness to workers whose government or nonprofit employers engage in activities with a "substantial illegal purpose." The job of defining "substantial illegal purpose" will fall not to the courts but to the education secretary.

In November, the cities of Boston, Chicago, San Francisco and Albuquerque, N.M., sued the Trump administration over those PSLF changes.

The complaint argued that a city or county government's resistance to the administration's immigration actions, for example, could lead the secretary to exclude that government's public workers — including a local nurse, like Kilty — from loan forgiveness.

Repayment plans are changing 

SAVE aside, trying to change repayment plans in 2026 is about to get weird.

That's because, in the One Big Beautiful Bill Act (OBBBA), Republicans also decided to gradually shut down two other popular, more affordable plans: Income-Contingent Repayment (ICR) and Pay As You Earn (PAYE). Both base payments on a borrower's income, and both will end in mid-2028.

Current borrowers can still, technically, enroll in these plans – for now. Another income-adjusted plan to consider — one that's not going anywhere — is Income-Based Repayment (IBR).

You can find a handy list of all of these plans and compare your monthly payments on the Education Department's Loan Simulator.

Congress also used the OBBBA to create two new repayment plans, beginning on July 1, 2026, that, for new borrowers, will replace all of the current options.

1. The standard plan

Under this new standard plan, new borrowers would agree to a repayment window between 10 and 25 years, depending on the size of their debt, with what they owe being divided up, along with interest, into equal monthly payments, like a home mortgage.

Under this plan, borrowers with larger debts would qualify for a longer repayment period.

2. The Repayment Assistance Plan (RAP) 

For borrowers worried they don't earn enough to cover the standard plan's rigid monthly payments, Republicans created the RAP for future and current borrowers alike.

Payments would, for the most part, be based on borrowers' total adjusted gross income (AGI), and the department will waive any interest that is left after a borrower makes their monthly payment. The result: Borrowers in good standing will no longer see their loans grow.

In fact, Republicans want to make sure borrowers see their balances go down every month. For those whose monthly payments are less than $50, the government would match whatever they do pay and apply it toward the principal.

While other plans offer forgiveness of remaining debts after 20 or 25 years, the RAP would delay that to 30 years. That's a big difference, says Preston Cooper, who studies student loan policy at the conservative-leaning American Enterprise Institute (AEI).

Borrowers with typical levels of debt "and typical incomes for their degree level are almost always gonna pay off well before they hit that 30-year mark," Cooper says. "So if you're going into RAP, I wouldn't be thinking about forgiveness because you're probably gonna pay it off."

Beginning July 1, 2026, new loans will be subject to new borrowing limits

We've covered big changes to repayment, but there are also big changes to how much graduate students can borrow in the first place. (Undergraduates won't see any changes.)

New limits will make it harder for lower- and middle-income borrowers to attend pricier graduate schools. Republicans are shutting down the current grad PLUS program, which allows students to borrow up to the cost of their degree.

"Colleges could simply raise the price, pass the cost on to students, and the federal government would be required to write a check through the federal student loan program, " Cooper says. "That system was completely untenable, and I very much understand why Congress elected to end it." 

After July 1, grad students' borrowing will be capped at $20,500 a year. Ideally, Cooper says, this will push some schools to lower their prices.

Until they do, though, Persis Yu, with Protect Borrowers, says many students will face a serious funding gap between their federal loans and the actual cost of graduate school.

"Students are gonna have to make up that gap with some other type of funding," Yu says, "and many students are gonna have to turn to the private student loan market."

Mayotte, at TISLA, says she thinks some schools will abandon certain degree programs.

"I got a bad feeling in the pit of my stomach when this law went through because I don't think it's gonna lower the cost of education like members of Congress think that it might," Mayotte says.

Borrowers working toward a professional graduate degree (think medicine or law) will have their borrowing capped at $50,000 a year.

Parents and caregivers who use parent PLUS loans to help students pay for college will also see new loan limits. They will be capped at $65,000 per child.

"The precipice of a default cliff"

Amidst all this change, data shows that millions of borrowers are struggling to keep up with their payments.

Preston Cooper at AEI recently published an analysis of the latest federal student loan data, and the results were sobering: 5.5 million borrowers in default, another 3.7 million more than 270 days late on their payments and 2.7 million in the early stages of delinquency.

"We've got about 12 million borrowers right now who are either delinquent on their loans or in default," Cooper says.

That's more than 1 in 4 federal student loan borrowers – a crisis raising bipartisan alarm.

Persis Yu, of Protect Borrowers, warns America is at "the precipice of a default cliff."

Mayotte adds, "I really do think we're headed for historic default rates, for a while."

And so, heading into 2026, the big question hanging over the Trump administration and Congressional Republicans is: Can all the changes they've made help bring these borrowers back into good standing? Or will the default numbers snowball into an avalanche?

Copyright 2025 NPR

With tensions already high in Minnesota after an Immigration and Customs Enforcement officer killed Renee Macklin Good, the Trump administration is ramping up the pressure on cities and states to cooperate with its immigration crackdown.

The administration had already surged federal agents — sometimes accompanied by military troops — to Los Angeles, Portland, Chicago, Charlotte, Memphis, Washington D.C. and New Orleans.

Now the White House is threatening to cut funding for sanctuary cities. Here's a brief explanation of how local governments interact with federal immigration enforcement, and what the White House can and can't require from them.

A fight over federal money 

President Trump threatened this week to cut "significant" federal funding to sanctuary cities. He hasn't said exactly what money his administration wants to cut, though he gave a deadline of Feb. 1.

Nor has Trump said exactly which cities or states will be targeted, though the Department of Justice did publish a list of more than 30 cities, states and counties in August. (That list includes the state of Minnesota, though not Minneapolis or St. Paul or their respective counties).

In remarks on Tuesday at the Detroit Economic Club, Trump seemed to be focused on places that limit their cooperation with ICE.

"They do everything possible to protect criminals at the expense of American citizens. And it breeds fraud and crime and all of the other problems that come," Trump said. "So we're not making any payment to anybody that supports sanctuary cities."

This is not the first time President Trump has made a threat like this. During his first term, the president tried to withhold some federal funding from sanctuary cities. More recently, Trump signed an executive order nearly a year ago directing the Departments of Justice and Homeland Security to make a list of sanctuary cities and withhold money from them.

But courts have sided against the administration in nearly every case, saying that the federal government cannot use funding to coerce state and local governments into changing their policies on immigration.

"Here we are again," U.S. District Judge William Orrick in San Francisco wrote in April. Orrick granted (and later extended) a preliminary injunction blocking the Trump administration from withholding federal funds from 16 jurisdictions, including San Francisco, Portland, Seattle, Minneapolis, St. Paul and New Haven.

"The threat to withhold funding causes them irreparable injury in the form of budgetary uncertainty, deprivation of constitutional rights, and undermining trust between the Cities and Counties and the communities they serve," Orrick said.

No precise legal definition of 'sanctuary'

There's no exact legal definition of "sanctuary city." But broadly speaking, the term refers to any city, state or county that limits its cooperation with federal immigration authorities.

The legal questions here are nuanced. Local law enforcement cannot block federal agents from doing their work but courts have said that state and city officers can withhold some cooperation.

The legal arguments are rooted in the U.S. Constitution and the division of powers between the federal government, which is in charge of immigration enforcement, and state and local governments, which run their own police and sheriffs' departments.

Courts have backed states that don't want to share data on residents in their records, including information about driver's licenses. And in many places, state and local law enforcement will not honor what's known as a "detainer request" from ICE, which essentially asks police to hold someone in detention until immigration authorities can take custody.

Local officials push back 

Virtually all the cities and states the administration has focused on so far are led by Democrats, who don't seem to be backing down after Trump's threat to cut federal money.

"This is just a threat to intimidate states like New York into bowing into submission. And that is something we'll never do," New York Governor Kathy Hochul said earlier this week. "You touch any more money from the state of New York, we'll see you in court."

State and city leaders argue there is a fundamental public safety rationale for their sanctuary policies. They say that working with ICE would undermine trust and cooperation between local law enforcement and immigrant communities as they seek to prevent crime.

There's clearly a political aspect to this as well. In many sanctuary cities, voters are asking Democratic leaders not to give in to the White House and its immigration agenda, so local leaders may have a strong incentive to dig in their heels.

Why local cooperation matters 

In the past, ICE has found that it's faster and safer to arrest people who are already being held in local jails. And that's one reason ICE was able to make so many arrests during the administration of President Obama, for example, before sanctuary policies were as widespread as they are now.

The White House says a lack of local cooperation is hindering its efforts to build "the largest deportation operation in the history of our country," a pledge Trump made frequently during his reelection campaign.

"Minnesota's 'leaders' have chosen defiance over partnership," the White House said in a statement on Friday.

But Democrats say the administration is deliberately creating confrontations in cities and states that are led by political opponents, provoking chaotic scenes on purpose for reasons that go beyond simply enforcing immigration law.

Copyright 2026 NPR

On a recent Saturday, a group of teenage musicians took to a stage inside an unlikely place: an unassuming unit in a business park at the bottom of Lincoln Avenue in Pasadena.

This space has a stage sitting on its concrete floor with the words "Backyard Party" playfully scrawled across the bottom.

The members of a band called The Wendolls sound checked with Matt Chait at the mixing board.

Backyard Party, one of the area’s newest all-ages venues, is the brainchild of Chait and fellow organizer Sandra Denver.

“The fires crushed garages where kids would have been playing. It burnt backyards where they would have been playing. It burnt down the schools where they would have been playing. So this is the communal backyard party. That’s specifically what we built and why we built it,” Chait said just outside the makeshift venue. The only thing that sets it apart from the nondescript units around it is a handwritten sign that says ‘No Ins and Outs.’

Chait, who was evacuated from his residence during the Eaton Fire, teamed up with Denver to manage the volunteer-run Backyard Party a few months ago. Her daughter sung lead vocals in a band called Sly, one of four bands on the lineup.

“We wanted to provide a space for all of the teen bands all around to come and play and help them create a kind of scene,” Denver said.

It’s the type of spot Denver said she wishes she had growing up in Phoenix, Arizona.

The tip box at Backyard Party

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Robert Garrova / LAist

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And she’s just one of several supportive parents here who are helping load in amps and guitars and bass drums.

Sixteen-year-old Jett Bizon is the drummer for Saints of Sinners, one of the bands on the bill. He said there’s another reason there are so many parents in the crowd.

“Well, nobody drives. Everybody needs a ride,” Bizon said with a chuckle.

With his long dark hair, Bizon explained that he’s already played some legendary local venues like The Whiskey a Go Go. But he said it feels like Backyard Party is becoming a much needed space for younger musicians in the area.

“We need to let out some type of energy and everybody’s putting it into music,” Bizon said. “I think it’s a great thing. Finally a scene again, it’s fun.”

As Bizon and his bandmates played their set of hard rock songs, the only people on their phones in the crowd were parents filming.

Some of the young folks taking the stage were affected by the Eaton Fire in one way or another. Some of them were evacuated. Others lost homes or saw their friends displaced.

Payton Owen was part of the crew running the door, taking tickets and dolling out snacks. She too is a musician and writes reviews of some of the concerts here.

“I think it’s amazing. I think it’s really like a point of community,” she said from behind a glass case filled with bags of popcorn and candy. “It’s a really nice opportunity for kids to really have somewhere where they can go.”

Teenager Elise Lamond agreed. She’d been following Chait around all night, learning how to set levels for the musicians, run the house lights and more.

“Most people at this age don’t have those kinds of opportunities,” she said, adding that, as a musician herself, she appreciated having free access to the venue’s music equipment, too.

Chait, who had a hand in running the now closed AAA Electra 99 venue in Anaheim and has been a musician since he was 12, said Pasadena and Altadena have a noteworthy music pedigree.

“I mean, Van Halen started in quite literal ‘backyard parties’ over on Allen. I think it lives here,” he said.

And Chait said he’s blown away by the new talent that’s come to this stage. For his part, he thinks it’s the start of a new scene that will balloon beyond Altadena and Pasadena.

Matt Chait going over the sound setup with Elise Lamond at Backyard Party.

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Robert Garrova / LAist

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“The fact that these kids who are now, let's say, 15-20 all lived through COVID and were very separated from each other. And now, in this particular neighborhood, are also separated again because of the fires. And they have supportive parents and now they have the physical place to be... All of the pieces of the puzzle are here,” Chait said.

For now, Chait said this is a labor of love. The space here is provided by Altadena Musicians, a non-profit that’s working to get instruments back in the hands of people who lost their gear in the fires. And as for ticket sales?

“It is the best part of running the venue: the end of the night, when we hand cash to these kids for playing,” Chait said.

Tonight’s bounty from a full-house? $320.

“There’s a couple of these kids, if they play one or two more times, we’re going to have to give them 1099s,” he said.

How to catch a BYP show

Backyard Party
1260 Lincoln Ave. #1300
Pasadena

For a calendar of upcoming shows, check out BYP’s website and Instagram.

On Friday, Southern California Edison filed lawsuits against Los Angeles County and several other agencies over their alleged roles in the Eaton Fire.

Two lawsuits were filed.

In one suit, the utility company alleges Southern California Gas delayed shutting off gas in the burn area for several days after the fire, making the blaze worse.

“SoCalGas’ design and actions caused gas leaks, gas fires, reignition of fires, gas explosions and secondary ignitions during the critical early stages of the Eaton Fire,” according to the suit.

The claim goes on to say this contributed to the spread of the fire and made firefighting and evacuation efforts more difficult.

In the second suit, the utility company alleges the Eaton Fire was made worse by the local government response, “including due to the failures of LASD, LACoFD, OEM and GENASYS in issuing timely evacuation alerts and notifications,” the claim reads.

The same filing says L.A. County was to blame for vegetation and overgrown brush in the Eaton Canyon area that fueled the blaze.

It also named the city of Pasadena and its utility system, Pasadena Water and Power, the city of Sierra Madre, Kinneloa Irrigation District, Rubio Cañon Land & Water Association, Las Flores Water Company and Lincoln Avenue Water Company as parties responsible for water systems running dry in Altadena as the fire broke out.

Edison says hydrants running dry compounded the extent of the disaster.

Those claims will be heard in the L.A. County Superior Court, which is also handling L.A. County’s lawsuit against SoCal Edison.

Edison itself is the subject of hundreds of lawsuits from survivors of the Eaton Fire, which could cost the company billions of dollars in settlements.

Edison has said its equipment likely sparked the Eaton Fire and filed these suits, in part, because it believes these various entities should share some of the blame for the disaster, which resulted in the destruction of thousands of buildings and the deaths of 19 people.

A compensation program Edison established for fire survivors who forgo suing the company has made settlement offers to more than 80 of those who applied.

A new organization is taking over production of the MLK Day Parade, almost 40 years after the first parade was held in South L.A. to commemorate the civil rights leader.

Bakewell Media, publisher of the Los Angeles Sentinel newspaper (a partner of The LA Local), was granted the permit in September to organize the parade for the first time by the Los Angeles Board of Police Commissioners. Formerly called the Kingdom Day Parade, the parade has been rebranded as the Los Angeles Official Martin Luther King Day Parade. The parade was previously produced and organized by Adrian Dove and the L.A. chapter of the Congress of Racial Equality California (CORE-CA).

With less than a week before the parade kicks off, LA Local reporter LaMonica Peters sat down with Danny Bakewell Jr., president and executive editor of the LA Sentinel, to discuss the details and what attendees should expect.

This Jan. 12 interview has been edited for brevity and clarity.

Why did you decide to produce the MLK Day Parade this year?

Bakewell: It all started because Adrian Dove, who was the previous promoter, had announced that he was retiring. When he announced he was retiring, LAPD, city council offices and other people said, “Hey, we still want to do the MLK Day parade. Would you guys be interested? You have the infrastructure to put it together.” And we said yes.

What’s different about this year’s production?

We’re going to start the parade with a singer performing “Lift Every Voice.” We’re going to play the message from Bernice King at the start of the show. Obviously, we have Cedric the Entertainer as our grand marshal to add the entertainment value, but the community has always been and will continue to be a major part of this parade.

Is ABC 7 covering the parade this year? 

It’s still going to be televised by ABC. We’re working diligently on how the show is going to be, but ABC has been a great partner.

What was the preparation for this parade?

Thanks to our corporate sponsors, we have a number of bands. The truth is, particularly in LAUSD at this time, and other school districts, they don’t have the funding to just get a bus and get here. I can’t say enough about Airbnb to Bank of America, all of our corporate sponsors, who are supporting all of the youth organizations.

Were there any unexpected challenges while preparing for this parade? 

This [The LA Sentinel office on Crenshaw Blvd.] is usually our command center during The Taste of Soul. It dawned on me last week that we’re going to be a mile away [from the parade route]. So, we made the decision to bring in a trailer to be our office at the corner of King and Crenshaw boulevards.

Any special guests this year besides the grand marshal?

I’m working on a surprise guest to be the singer for the national anthem. No matter what, we will give tribute to the Black national anthem “Lift Every Voice” as loud as we can next Monday.

What’s the long-term vision for this parade, if Bakewell Media continues to produce it?

We see the MLK Day Parade, and we want the world to see and expect to see this parade, the same way they see the Macy’s Parade, the Hollywood Parade or the Rose Parade. BET has come in this year as a partner. So there’s an opportunity to possibly do a national broadcast on BET. Not that we would lose our local television, but we see this as a major parade in this community and in the national African American community, celebrating the great work of Dr. Martin Luther King Jr. So, we are very excited.