economy
This year's college graduates face a changed student loan landscape
Student loan borrowers graduating college in May will face different repayment options than in prior years. Here's what to know.
TL;DR
- Federal student loan repayment options and debt forgiveness rules have been revised.
- The SAVE plan is no longer available for new borrowers graduating this spring.
- A new Repayment Assistance Plan (RAP) will launch July 1, with payments based on income (1-10% of earnings).
- A minimum monthly payment of $10 will apply to all borrowers under RAP.
- Previously available repayment plans (Standard, Graduated, Extended, IBR, ICR, PAYE) remain for loans disbursed before July 1.
- Spring graduates who re-borrow after July 1 will have limited options: only the new Tiered Standard Plan and RAP.
- New executive order restrictions may disqualify certain employees from Public Service Loan Forgiveness (PSLF), effective July.
- State-level debt forgiveness programs often target specific occupations or financial situations.
- The first federal student loan bill is typically due six months after graduation, with a grace period.
- Interest accrues on unsubsidized loans during the grace period.