7.5M Student Loan Borrowers Face July 1 Deadline—What to Do Now
Summary
Millions of federal student loan borrowers must choose a new repayment plan by July 1 due to federal changes that end several existing options. Borrowers who do not pick a new plan could be moved to higher-cost plans and may see their monthly payments increase.Key Facts
- About 7.5 million borrowers currently in the SAVE repayment plan must select a new plan by October 1.
- The SAVE plan is ending because of the Working Families Tax Cuts Act, which changes federal student loan rules.
- If borrowers fail to choose a plan, they will be automatically moved to the Standard or Tiered Standard repayment plan.
- These changes could make monthly payments much higher, especially for those who had $0 payments under SAVE.
- Other common repayment plans like PAYE, IBR, and ICR will no longer accept new borrowers after July 1.
- Borrowers should check their current plans at studentaid.gov and consider their options carefully to avoid increased costs.
- Parent PLUS loan borrowers must complete loan consolidation before July 1 to qualify for income-driven repayment or loan forgiveness programs.
- Payments that were paused will restart, with interest having accrued during the pause period.
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