economy
A Major Student Loan Overhaul Takes Effect July 1. Here's What Borrowers Need to Know.
Major changes are coming to the student loan landscape starting July 1 that will limit how much Americans can borrow and their repayment options.
TL;DR
- New borrowing limits will be implemented for Parent PLUS loans, graduate students, and professional degree students starting July 1.
- New federal loan borrowers will have only two repayment options: the Tiered Standard Plan and the Repayment Assistance Plan (RAP).
- Existing repayment plans like PAYE and ICR will be phased out by July 1, 2028, requiring borrowers to switch to new plans.
- Borrowers in the SAVE plan must choose a new repayment option before July 2028, or they will be automatically placed in the standard plan.
- Pell Grant eligibility is being revised, impacting students receiving non-federal aid and those with high assets, while expanding to short-term workforce programs starting July 1, 2026.