Federal student loan changes become effective this week. Here's who may be impacted.
Summary
New federal student loan rules begin this week, changing repayment plans and borrowing limits for some students and parents. These changes mainly affect borrowers using the SAVE repayment plan, new borrowers after July 1, graduate students, and parents using Parent PLUS loans.Key Facts
- The SAVE repayment plan is being phased out, and current borrowers must switch to another plan within 90 days or face automatic placement in a standard plan.
- New borrowers after July 1 will choose between a standard repayment plan or a new simpler income-driven Repayment Assistance Plan.
- Graduate PLUS loans will no longer be available after July 1 for new borrowers; new borrowing limits will start, with some exceptions for professional degree programs.
- Parent PLUS loans will have new annual and lifetime caps on how much parents can borrow from July 1 onward.
- Some borrowers will see little change, while others will face significant shifts in repayment and borrowing options.
- Temporary protections may exist for students already enrolled in certain graduate programs regarding borrowing limits.
- The new rules aim to simplify repayment but reduce the number of income-driven options for new borrowers.
- These changes affect federal student loans and do not apply to private loans.
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