Major Student Loan Changes Take Effect July 1. Here's What Borrowers Need to Know.
The Department of Education is phasing out SAVE and limiting Graduate PLUS and Parent PLUS borrowing as new Repayment Assistance Plan rules begin.
- On Wednesday, July 1, 2026, major federal student loan changes take effect under the One Big Beautiful Bill Act, reshaping borrowing limits and repayment options for millions of Americans.
- The Department of Education is phasing out the Biden-era Saving on Valuable Education plan, which served 7.2 million borrowers, as new federal regulations officially replace existing repayment programs today.
- Graduate students face new annual limits of $20,500 and lifetime caps of $100,000, while Parent PLUS loans are capped at $20,000 yearly and $65,000 total over a student's studies.
- Impacted borrowers currently enrolled in the SAVE plan have 90 days to select a new repayment option, or they will be automatically enrolled in the Repayment Assistance Plan or Tiered Standard Plan.
- Borrowers enrolling in autopay by September 30 receive a 1% interest rate discount through June 30, 2028, while undergraduate and graduate loan rates increase to 6.52% and 8.07% respectively on Wednesday.
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These Changes to Student Loans Are Now in Effect
Changes to federal student loans expected to affect millions of borrowers took effect on Wednesday. Part of President Trump's "Big Beautiful Bill," the changes mean the end of some payment plans and new limits for graduate loans. Along with the end of the Biden-era SAVE plan, the changes are expected...
What Borrowers Should Know as Sweeping Student Loan Changes Take Effect
Graduates arrive to the University of Maryland commencement ceremony in College Park, Maryland, on May 22, 2025. —Allison Robbert—The Washington Post/Getty Images)Sweeping changes to federal student loans included in President Donald Trump’s One Big Beautiful Bill are taking effect on Wednesday, with implications for millions of borrowers.Starting on July 1, new student loan borrowers will face a narrowed set of repayment options consisting of t…
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