The Brief

If you're a federal student loan borrower or about to become one, your head may be spinning.

On July 4, when President Donald Trump signed the One Big Beautiful Bill Act into law, he also greenlit a history-making overhaul of the federal student loan system — one that will affect the lives of many, if not most, of the United States' nearly 43 million student loan borrowers.

And boy is it a lot to unpack, with new, tighter borrowing limits and dramatically reduced repayment options, to name just a few of the sweeping changes.

In May, we explained this overhaul, as conceived by House Republicans. Now that a Senate compromise has been signed into law, here's an updated guided tour of the final changes.

Let's start with the elephant in the room:

President Biden's SAVE plan is ending

The most generous repayment plan is the Biden-era Saving on a Valuable Education (SAVE) plan. But it is so generous, with its low monthly payments and expedited loan forgiveness, that Republicans have so far successfully argued in court that it is too generous. In fact, the nearly 7.7 million borrowers currently enrolled in SAVE have been in legal limbo for months, without interest accruing or required monthly payments.

That's about to change.

"For all practical purposes, I would say SAVE is just kind of dead at this point, even if it's technically on life support," said Preston Cooper at the conservative-leaning American Enterprise Institute (AEI).

This month, the U.S. Education Department announced that on Aug. 1, SAVE borrowers will, once again, see their balances grow — with interest. Because the SAVE plan is still enjoined, though, borrowers won't yet be required to make payments. Still, Cooper said that many borrowers, rather than watch their loans balloon, will likely want to move to a different plan.

Roxanne Garza, director of higher education policy at the liberal-leaning EdTrust, worries that the relatively last-minute announcement about interest accrual will cause problems for the Education Department, which saw roughly half its staff cut by the Trump administration.

"I think what will likely happen now is you will see a rush of people trying to take action that will, again, likely create an even bigger backlog," said Garza.

Under the One Big Beautiful Bill Act, borrowers in SAVE will have to change plans by July 1, 2028, when SAVE will be officially shut down. If they wait, though they currently can't be required to make payments, they will see their loans explode with interest.

But the two new plans that the law creates won't be ready for a year, and the department's own website, meant to help borrowers navigate their repayment options, does not reflect this confusing new landscape, except for a banner that says: "Loan Simulator will be updated at a later date to reflect recent legislative changes."

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

Undergraduates won't see any changes to their loan limits. But it's a very different story for graduate students and parents.

For graduate students, new limits will make it harder for lower- and middle-income borrowers to attend pricier graduate programs. The current grad PLUS loan allows students to borrow up to the cost of their graduate program, but Republicans are shutting it down this time next year.

After that, grad students' borrowing will be capped at $20,500 a year with a lifetime graduate school loan limit of $100,000, a big drop from the previous cap of $138,500.

How big a deal will this be? AEI's Cooper has been crunching the numbers and said, "Just under 20% of master's students borrow above the proposed limits."

Borrowers working toward a professional graduate degree (i.e., medical or law school) will have their borrowing capped at $50,000 a year and their lifetime cap increased from $138,500 to $200,000.

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 $20,000 a year and, in aggregate, at $65,000 per child.

Cooper says only one-third of parent PLUS borrowers with dependent children currently take out more than this new annual loan cap.

The law also sets a new lifetime limit, for undergrad and graduate loans combined, at $257,500 per person.

Repayment options for borrowers are changing dramatically

Republicans are reducing repayment options for new borrowers from the current seven plans down to two new plans. The new plans are:

1. The standard plan

New borrowers will be assigned a repayment window of between 10 and 25 years, depending on the size of their debt, with equal monthly payments like a home mortgage.

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

• Owe less than $25,000, and repay over 10 years.
• Owe $25,000 or more but less than $50,000? Repayment expands to 15 years.
• Owe $50,000 or more but less than $100,000: Repay over 20 years.
• Anyone owing $100,000 or more would repay over a 25-year period. 

2. The Repayment Assistance Plan (RAP) 

For borrowers worried they don't earn enough to cover the inflexible monthly payments of the new standard plan, Republicans have also created the Repayment Assistance Plan (RAP).

On RAP, payments would largely be based on borrowers' total adjusted gross income (AGI).

• Borrowers earning no more than $10,000 would be asked to pay $10 a month. 
• Earn more than $10,000 but not more than $20,000, and your payment will be based on 1% of AGI. 
• More than $20,000 but not more than $30,000, it would be 2% of AGI and so on up the income scale.
• Repayment tops out at 10% of AGI for borrowers earning $100,000 a year or more.

Current borrowers will also have access to this new RAP plan, as well as to some older plans.

RAP is the latest in a long line of income-based repayment plans. How does it compare with previous plans?

Monthly payments for many middle-income borrowers on RAP will be lower compared with earlier plans, according to multiple experts. But RAP is not as generous as the Biden-era SAVE plan, which, again, is being phased out.

RAP will require even the lowest-income borrowers to make a minimum monthly payment of $10, ending the $0 option of previous plans and making it more expensive for these borrowers.

This new $10 minimum payment wouldn't make a big difference to the government's coffers, said Jason Delisle, who spoke to NPR in May, when he was studying student loan policy at the Urban Institute. Delisle has since been appointed to a position in the Trump administration.

Delisle said the purpose of RAP's new $10 minimum payment likely stems from "emerging research that requiring people to make some payment each month is good because it keeps them connected to the loan and makes it less likely that they'll default."

But some borrower advocates worry that this new minimum payment could have the opposite effect.

For the lowest-income borrowers, asking for $120 a year is "significant," EdTrust's Garza told NPR in May. "I think having that be a required minimum payment will likely push more borrowers into default."

But RAP also comes with a few new perks that borrowers will likely appreciate.

RAP will waive any interest that is left after a borrower makes their monthly payment. 

If their monthly payment is $50 but they owe $75 a month in interest, the government will waive the remaining $25.

The result: Borrowers will no longer see their loans grow, which was a common downside to previous income-driven repayment plans.

Borrowers on RAP will also see their balances go down every month.

The government will pitch in up to $50 to make sure lower-income borrowers see their principal balances shrink.

For example, a borrower whose monthly payment makes only a $30 dent in their principal would see the government knocking off an extra $20 a month.

Borrowers whose monthly payments already reduce their principal balance by at least $50 would get no extra help from the government.

"It's a form of monthly loan forgiveness," Delisle said. "It's a drip, drip, drip of loan forgiveness, rather than waiting for the big payout at the end of 20 years."

The loan forgiveness math will change.

While previous plans offered forgiveness after 20 or 25 years, the RAP would extend that to 360 qualifying payments, or 30 years. That's a big difference, said AEI's Cooper.

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 said. "So if you're going into RAP, I wouldn't be thinking about forgiveness because you're probably gonna pay it off before you hit 30 years."

In short, the days of what Delisle called "the big payout" are over.

But wait! Current borrowers have another loan forgiveness option (sort of).

In addition to RAP, an older plan known as Income-Based Repayment (IBR) will still be available to borrowers who take out their loans before July 1, 2026.

Part of the reason IBR remains is that, unlike other income-driven repayment plans, IBR wasn't created by the Education Department. It was created by Congress and is codified in statute.

How does IBR work? For borrowers with loans older than July 2014, their payments are capped at 15% of discretionary income. Payments on younger loans are capped at 10%.

With the Biden-era SAVE plan being wound down, Delisle said, most lower- and middle-income borrowers would likely have lower monthly payments on the new RAP compared with IBR.

But, Delisle said, borrowers with older loans might still want to enroll in IBR if they've been in repayment for close to 20 or 25 years, so they can qualify for loan forgiveness.

That's because, on IBR, pre-2014 loans qualify for forgiveness after 25 years. For newer loans, it's just 20 years — both considerably shorter than RAP's 30-year schedule.

One big caveat to all this: The Education Department has temporarily stopped processing all loan forgiveness for borrowers on IBR because of the legal actions surrounding the SAVE plan, according to a statement from Education Department Deputy Press Secretary Ellen Keast.

Keast said the Biden-era rule explaining SAVE "provided the authority to count forbearances in IBR toward loan forgiveness" and, because that rule has been frozen by the courts, the department can't accurately determine loan forgiveness under IBR. "Discharges will resume as soon as the Department is able to establish the correct payment count," Keast said.

The department told NPR that any borrowers who make payments after they're eligible for forgiveness will eventually get a refund.

Edited by Nicole Cohen
Copyright 2025 NPR

Two of California’s largest courts are testing an AI tool that can draft orders and produce research memos.

Judges so far are using it primarily for civil cases, but documents obtained by CalMatters indicate the possibility of expanded applications in criminal cases, where people’s freedom and access to justice are on the line.

The Los Angeles County Superior Court began a pilot program in February to test a tool created by the company Learned Hand. Other courts may follow, according to Learned Hand founder and chief executive officer Shlomo Klapper.

Learned Hand uses a combination of language models from Anthropic, OpenAI and Google to act as an AI clerk for judges. The company says it tests for bias and accuracy, but it has not yet published results.

In Riverside County, which has a $10,000 agreement with the company to test the program, civil and probate attorneys are primarily using the tool to draft research memos that help judges reach their decisions. It’s typical for research attorneys to assist judges as they review cases.

Los Angeles County Superior Court has a roughly $314,000 contract that includes a roadmap to test the tool’s use in criminal, family and probate divisions. Officials would not describe in detail to CalMatters the criteria they’re using to evaluate whether use of the tool can safely expand to criminal and family courts, where the stakes are often much higher than in civil cases.

One judge who spoke to CalMatters on condition of anonymity due to judicial rules of conduct was alarmed when their colleagues at a recent luncheon said the technology could be used one day to evaluate appeals from people who believe their conviction or sentence was tainted by racial bias. California courts are handling a wave of those claims after lawmakers passed the Racial Justice Act in 2020.

“I think it is outrageous,” said the Los Angeles County Superior Court judge. “AI cannot and never will be able to replace human judgment in evaluating complex social dynamics. Ultimately, that will erode the public’s confidence in the competence and fairness of the judiciary.”

A majority of California's superior courts now have generative AI use policies, according to documents obtained by CalMatters via public records requests, which they were required to create by the state Judicial Council before using the technology. Roughly a dozen of the 51 courts that have responded to CalMatters’ requests said they are using AI-powered tools from LexisNexis, Thomson Reuters, and Microsoft’s Copilot.

Use of AI in courts has been controversial because of the propensity of AI models to cite falsehoods and to produce sycophantic text. Models from major companies like Google and Anthropic can reduce critical thinking and brain activity, according to a 2025 MIT study.

Language model hallucinations have already made it into the judicial system. Researcher Damien Charlotin has documented hundreds of instances of litigants, lawyers, and judges making mistakes when using AI to do their jobs including nearly 90 cases in state or federal courts based in California since August 2024.

Last fall, a Los Angeles-based lawyer received a historic $10,000 fine for citing cases that don’t exist, and earlier this month the Sacramento Bee reported that use of AI led to errors in four cases handled by prosecutors in Nevada County. Most of these cases involve lawyers or people who are representing themselves in court, but UCLA Law School professors predict that more judges will make AI-fueled mistakes in the future. In recent months, the U.S. Senate investigated federal judges in Mississippi and New Jersey for drafting decisions with generative AI that had serious factual errors.

Klapper, who previously worked as a clerk for a federal appeals court and for surveillance technology company Palantir, said the judiciary needs AI in order to reduce backlogs and increase efficiency.

“Could we hire more people?” he told CalMatters. “Maybe, but it’s not going to keep pace with the exponential increase that’s coming, nor is it going to be able to adequately solve the crisis of today. I think the only solution is to give every single judge and staff attorney their own AI clerk.”

Klapper said he’s aiming to combine the best parts of what human judges can do with the best parts of what machines bring to bear.

“I’m not saying all machines aren’t biased,” he said. “I’m not saying my machine isn’t even biased. I’m saying we can test it and people have tested it. And that is the benefit over humans.”

Generative AI use policies for the Los Angeles and Riverside County superior courts only require disclosure if a motion, decision, or other document is written entirely with generative AI.

Both courts refused to say whether plaintiffs are aware that the tool is being tested on their cases. In a statement to CalMatters, a spokesperson for the Los Angeles County Superior Court said testing is done on motions that have already been decided, separate from live case environments. However, the contract allows for testing on live cases.

“It is important to note that even with successful evaluation and thorough testing, the Court remains several months, if not years, away from implementing this type of tool,” said the spokesperson.

The contract allows the tool to be used for two critical motions in the criminal division: A motion to suppress, which is designed to determine what type of evidence the prosecution is allowed to present at trial, and motions for post conviction relief, which are filed by people who have already been convicted and want another shot at freedom.

That’s the “greatest concern” for Los Angeles County District Attorney Nathan Hochman. When he reviewed the contract, he referred to the motions as “two incredibly important motions in the criminal justice system.”

“When you’re dealing with someone’s liberty — as opposed to in the civil setting, which is everything other than liberty — the stakes couldn’t be higher,” said Hochman. “I don’t want to take the chance, particularly in a criminal case, that AI happens to get it wrong. And now someone’s constitutional rights have been infringed. Someone has gone to prison who shouldn’t have, or on the flip side, that somehow someone gets off.”

'An extremely perilous road'

In Los Angeles, some judges first heard about the new Learned Hand contract during a March presentation by Superior Court Judges Yvette Verastegui and Olivia Rosales. They lead the criminal branch and visit courthouses throughout the county as part of an annual roadshow, where they update judges on court operations, discuss workload and field questions. During a luncheon, Verastegui and Rosales said the tool could be used to assist with Racial Justice Act petitions in the future.

California’s Racial Justice Act allows people to challenge a criminal conviction or sentence that they believe was based upon racial bias. Petitions are filed directly to the court from people in state prison. If a case is found to have merit, the process includes appointing legal counsel, filing briefs and setting evidentiary hearings before a judge would decide whether to grant the petition.

That process could look different with a tool like Learned Hand. Verastegui and Rosales explained that, following an incarcerated person’s petition, the tool could generate tentative decisions for judges to consider in denying or advancing cases to the next stages, according to one judge who attended the luncheon.

“The concern, of course, that I have is that the courts will utilize that as a reference point and then get stuck to that initial analysis,” said the judge. “It’s an extremely perilous road to go down. Putting aside the inaccuracy, which will be a significant concern, it dehumanizes the whole process. It does not treat people as individuals with lived experiences. It essentially reimposes a one-size-fits-all style of justice.”

A second Los Angeles Superior Court judge who spoke with CalMatters on the condition of anonymity remembered the presentation and said they would not trust nor use the tool to summarize a Racial Justice Act petition.

AI can replicate or intensify patterns contained in the data used to make a model, including human biases. Large language models have a history of demonstrating race and gender bias, an analysis of predictive policing tech used by LAPD found racial bias, and an analysis of the risk assessment algorithm COMPAS found that it is more likely to label Black people as at risk of committing crimes after incarceration than white people with a similar record.

Public defenders who spoke with CalMatters echoed those concerns.

Elizabeth Lashley-Haynes, a deputy public defender at the Los Angeles County Public Defender’s Office, said it would be “highly problematic and bordering on unethical” for a judge to use the tool to review Racial Justice Act petitions, which she described as “incredibly nuanced.”

“They’re like nothing else in the legal system that has ever really been done,” said Lashley-Haynes, who specializes in Racial Justice Act cases. “Words that are used in these cases that have racial undertones or racial meanings are way beyond the realm of anything that artificial intelligence could do.”

In interviews with CalMatters, Klapper and Los Angeles County Superior Court Executive Officer, David Slayton, denied that the court has any plans to use the tool for Racial Justice Act petitions. A spokesperson for the Los Angeles Superior Court later confirmed in an email to CalMatters that the contract permits the tool to be used in such a way “but that possibility has not commenced in any way.”

Klapper said if they were to build out a Racial Justice Act module, the tool would need to be evaluated for bias and co-developed with the court.

“The timing very fortuitous, right?” he said. “It’s a very fraught decision, I’m not going to lie…extremely high stakes — a scenario where I understand people might be very concerned. Especially with criminal, I have even more hesitancy, even more guardrails than normal about, because there are liberty interests at stake.”

Extending beyond civil cases

In Los Angeles, six superior court judges and their research attorneys are primarily using the Learned Hand tool to conduct research, summarize motions and assist in drafting tentative rulings, according to Slayton. He says the tool won’t move beyond the civil division “until the court leadership is comfortable.”

“The court is being very deliberate and careful about how we use technology like this,” he said. “So until we evaluate it and determine that it is effective in those areas, we will not extend it to other areas.”

Los Angeles County Superior Court's Hollywood Courthouse, in Los Angeles, on March 12, 2025. Photo by Jules Hotz for CalMatters The tool will be evaluated on a quarterly basis to determine its future application, Slayton said, but he did not specify what kind of evaluation that entails. In an email to CalMatters, a spokesperson later said that Learned Hand is evaluated “against the same substantive expectations applied to law clerks and research attorneys: accurate legal research, sound analysis, neutral and judge-ready writing, and reliable work product that supports judicial decision-making.”

Los Angeles County Superior Court Judge Samantha Jessner, who chairs the Judicial Technology Advisory Committee, said she was unaware of the possibility that the tool could eventually be used outside of the civil division until recently. Judges are not privy to contract negotiations due to certain ethical limitations, she said.

“I think we have a duty and obligation to explore whether or not there is a place for artificial intelligence in what we do as a judicial branch and that’s exactly what this pilot is intended to afford us the opportunity to do,” said Jessner.

Riverside County Superior Court signed an agreement with Learned Hand in February. In emails obtained by CalMatters, Klapper proposed to two Riverside County Superior Court executives, Jason Galkin and Sarah Hodgson, that the court use the tool for a common civil court motion and “then expand quickly once we earn our stripes.” He suggested that Hodgson assemble a list of motions and workflows “that generate the most pain,” citing examples that included the Racial Justice Act.

Roughly two weeks later, Hodgson described the most laborious motions “that want to drive us into retirement,” including discovery motions and attorney fee motions. For criminal cases, the court suggested that Klapper focus on “things with the largest paper records,” citing death penalty habeas petitions and parole revocation.

Since the pilot started, seven civil and probate attorneys have been granted access to the tool. Galkin, the chief executive officer of the Riverside County Superior Court, said they are “kicking the tires on the product” to see what tasks it can do. The tool is not being used to draft tentative rulings, he said.

“We don’t even know if expansion is likely so there is no set criteria for what expansion might look like or thresholds for that because right now, the core question is: Does this help staff and does it advance what they’re trying to do in their roles?” said Galkin.

As testing is underway, attorneys like Hochman say that use of AI is inevitable, but would be better suited for low-level, repetitive and routine tasks.

“It’s the analysis of the case itself, coupled with the conclusions that will be reached, that I’m very hesitant to trust AI at this point — in large part, because I don’t know all of the inputs that AI is using to make its decision. The only thing I’m 100% sure of is that AI didn’t go to law school,” said Hochman.

Cayla Mihalovich is a California Local News fellow.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

California’s Board of Equalization is a coveted spot once again for state lawmakers looking for a new gig almost a decade after then-Gov. Jerry Brown signed a law gutting the organization of any serious governing responsibility.

This year, three current state lawmakers are competing for seats on the nation’s only elected tax board. They’re among some two dozen candidates on the ballot for its four elected positions, which are divided by geographic districts.

The board has long been a launching pad to higher offices in California politics — Fiona Ma served on it before becoming state treasurer, as did Betty Yee and Malia Cohen before each being elected state controller.

The agency itself is a throwback to the 19th Century. It’s rooted in an 1879 constitutional amendment that created it and charged it with “equalizing” county property tax assessments statewide.

From that narrow mandate, it swelled to become a juggernaut that collected a third of the state’s tax revenue and provided a venue for people and businesses to contest their tax bills in front of the elected board. It survived numerous efforts by governors to kill it outright, including attempts by Pete Wilson and Arnold Schwarzenegger.

That is until 2017, when a cascade of allegations about board members misusing the office to promote themselves led to an authoritative state audit that lawmakers could not ignore.

Brown signed a law stripping the agency of any powers beyond what voters gave it in 1879 and created two new departments that report to the governor instead of the elected board: one to collect sales and use taxes and another to hear taxpayer appeals.

After that, Board of Equalization elections tended to be lower profile contests. Ted Gaines, a former Republican state lawmaker from the Sacramento area, won a seat. Former Democratic Assemblymember Sally Lieber is up for reelection on the board this year. The other members had experience in local politics instead of inside the Capitol.

“We’re lean but we’re not mean,” said Lieber, the incumbent for District 2, which includes 19 counties centered on the Bay Area. “I think the Board of Equalization is the right size in the system right now…I do really believe that the board has a role to play in being a forum for taxpayers to come forward to.”

This year voters will see more contentious elections for the tax board:

• In District 1 representing inland California, Republican state Sen. Shannon Grove of Bakersfield has more than $900,000 in a campaign account and name recognition from her representing the San Joaquin Valley in the Legislature since 2010. Democrats are putting up a fight for the district. Fresno City Councilmember Nelson Esparza is running with the party’s support.
• In District 2 representing coastal California north of Los Angeles, incumbent Lieber faces San Mateo Community College District Trustee John Pimentel. Lieber has the Democratic Party’s endorsement, but a number of Bay Area Democratic leaders are backing Pimentel, including state Treasurer Ma and San Jose Mayor Matt Mahan.
• In District 3 representing the Los Angeles area, former Monterey Park City Councilmember Yvonne Yiu put up $760,000 of her own money and has about $1 million on hand. The race has another heavyweight in Assemblymember Mike Gipson, a Democrat from Gardena who has served in the Legislature since 2014. 
• District 4 representing the San Diego area has an especially crowded race with Democratic state Sen. Tom Umberg of Santa Ana, San Ysidro school board member Martín Arias, San Diego Unified School District board member Cody Peterson, and Denis Bilodeau, a Republican supported by San Diego Assemblymember Carl DeMaio’s Reform California organization.

A forum for California taxpayers

The board was always popular among taxpayer advocacy groups, who liked that it provided a forum to focus on tax issues in a capital where debates often center on labor and business.

“It’s a very useful elected body that answers to the voters,” said Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association.

Some of this year’s candidates are thinking of ways to make the most of the agency.

Arias believes the board could do more to assist homeowners and potential homeowners. As a taxpayer advocate in the San Diego County Assessor’s Office, he says he works with the Board of Equalization every day and has a front seat to how the system works.

“I think there’s a bigger opportunity here to make the Board of Equalization the constitutional office that it is — that it should be,” he said. “There’s a clear opportunity here for us to start advocating at the state level for all of our taxpayers, including those that don’t speak English.”

Umberg said he’d like the board to have more investigative power and resources. Citing instances in which San Bernardino and Los Angeles assessors have been arrested on felony charges, he said he’s most interested in the board’s oversight of property tax assessors.

“Although it’s not a high-profile job, it’s a critically important job, especially when we’ve got so many revenue challenges in California,” Umberg said in an interview with CalMatters.

Questioning BOE’s relevance

Advocating for the board’s expansion has drawn criticism from former board members and employees. Yee, a board member from 2004 to 2014, has been vocal about abolishing the board entirely because she believes that its limited responsibilities could be easily transferred to another department or agency.

“I just really do question how this board continues to have relevance,” she told CalMatters. “I sometimes feel like the board is really doing a lot of work in search of finding problems to solve. …I know with each of the board members, they feel very strongly about being a taxpayer advocate. But frankly, every public official should be a taxpayer advocate. ”

Democrats stopped short of killing the agency entirely because they would have had to put that question to voters.

“They should have just chopped the head of the snake off and done away with the Board of Equalization altogether,” said Mark DeSio, a former communications director for the board. “They didn’t do that. They left enough of the cancer to grow back.”

He cooperated with the audit that revealed misspending at the agency that appeared intended to promote its elected members as well as another that showed widespread nepotism in its hiring practices. He then lost his job in the reorganization and filed a whistleblower retaliation lawsuit against the state.

DeSio believes lawmakers want seats on the Board of Equalization because it allows them to maintain a high profile until they can run for office again.

“That was the recipe for disaster a few years back,” he said. “Somebody better watch these guys. They’re not there for the policy. It’s for the exposure.”

Cayla Mihalovich is a California Local News fellow.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

Even as gas prices continued to rise across the United States, sales of electric vehicles fell in April. That is in contrast to strong growth elsewhere in the world, such as Europe. But American drivers are gravitating toward at least one more efficient powertrain: hybrids.

Sales of new EVs fell roughly 18 percent from March to April, according to the latest data from Edmunds, an auto research firm. Another company, Cox Automotive, pegged the drop at closer to 6 percent. Either way, experts said it’s clear that high gas prices aren’t leading to a significant shift toward EVs.

“There was a lot of window shopping,” said Ivan Drury, director of insights at Edmunds, noting that searches for electrified vehicles on the company’s site were strong. “It did not translate to tire-kicking and purchases.”

Price remains the steepest barrier for most people, said Drury. While electric vehicles can be less expensive to operate over the long-term — especially when gas prices are high — the upfront costs remain significant. The average transaction price for an EV in April was $6,214 higher than for vehicles with internal combustion engines, Cox reported.

“It’s still a cost hurdle,” said Stephanie Brinley, a principal automotive analyst at S&P Global Mobility. “You don’t know how long it’s going to take to get that back.”

At Thursday’s average gas price of $4.56 per gallon, an EV buyer would have to drive more than 40,000 miles to make up the difference with a car that gets 30 mpg. Savings on maintenance, like oil changes, could accelerate that timeline, but factors such as higher insurance prices and having to install a home charger could make the payback period even longer. If fuel prices fall, the advantage of an EV also shrinks.

“It’s very difficult for people to wrap their head around, ‘Hey, if I spend this $55,000, I might over time save’,” said Drury. “It requires a bit more math than most people want to go through.”

The calculus is much simpler for hybrid vehicles, which utilize batteries that can improve fuel economy by 25 to 45 percent without needing to plug in. A Honda CR-V, for example, gets around 29 mpg while the hybrid version gets 37. More and more popular models are only available as hybrids, a strategy that Toyota has perhaps embraced most notably. Last year, it ditched the gas-only version of the Camry sedan. The 2026 RAV4 followed suit.

Overall, Edmunds data shows that sales of hybrids are up 20 percent year-over-year and nearly 50 percent since February, when the U.S.-Iran conflict began. Sales of gas-powered gas are up about 11 percent over those same two months.

“I think this is going to be a hybrid moment,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive. “There are a lot of options.”

Used EVs provided another somewhat bright spot, she said. The segment saw a 3 percent increase in sales from March to April and a price premium of only $1,096 over used internal combustion vehicles. Used EVs also sold faster than their used gas-powered counterparts. “They’re really selling efficiently,” said Valdez Streaty, who added that there should be a glut of EVs available throughout the year as leases end. “I don’t think the inventory will be an issue.”

With Iran maintaining its hold over the Strait of Hormuz and summer travel season looming, gas prices appear set to keep climbing — which would only make an EV more appealing. Other parts of the world have seen significant jumps in sales since the conflict began, with Europe experiencing a surge and China setting an export record in April, according to BloombergNEF.

In the United States, though, it seems that only people already in the market for EVs are making the leap. “Edge-case people,” as Brinley called them. Dramatic pump readings “might nudge them because they were already in that direction,” she said. “But what we’re unlikely to see is a shift in current [internal combustion car] owners just fundamentally making that change simply because of gas prices.”

This article originally appeared in Grist at https://grist.org/solutions/why-hybrids-not-evs-are-winning-over-u-s-consumers/.

Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org