Student Loan Update: Full List of Rule Changes Coming in July
Summary
Starting July 1, millions of Americans with federal student loans will face major changes in how they repay their loans and qualify for forgiveness. These changes include new repayment plans, ending older programs, and stricter borrowing limits for students and parents.Key Facts
- A new Repayment Assistance Plan (RAP) will start, setting payments at 1% to 10% of income and offering loan forgiveness after 30 years.
- The Biden-era SAVE repayment plan will end, requiring about 7 million borrowers to switch plans or face higher payments.
- Several older income-driven repayment plans like PAYE and ICR will stop accepting new borrowers as they phase out by 2028.
- New borrowing limits will cap Parent PLUS loans at $20,000 per year and $65,000 lifetime per student, and graduate student borrowing at about $20,500 per year with a $100,000 lifetime limit.
- Grad PLUS loans will no longer be available for new graduate students starting July 1.
- If borrowers do not select a new repayment plan after SAVE ends, they will be moved to a standard repayment plan with likely higher monthly payments.
- Changes will also affect the Public Service Loan Forgiveness (PSLF) program, impacting eligibility and rules.
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