Borrowers can expect to see some of the most impactful changes in years coming to student loans in less than a month. Starting July 1st, a number of new policies and laws will take effect that will impact virtually every new and existing borrower. Many of the changes are the product of the 2025 congressional spending bill, including major upsets to payment plans and limits on student borrowing. Other changes are the result of negotiated rulemaking, including an effort to block Public Service Loan Forgiveness for some borrowers. Many borrowers won’t have to do anything right away with their student loans following these changes, but millions of others will have a relatively short window to act before facing potential consequences.
Nearly every student loan borrower will soon be impacted by changes coming to the repayment system. Besides the elimination of the SAVE plan, changes are coming to other Income-Driven Repayment (IDR) plans, including the addition of the Repayment Assistance Plan (RAP). Borrowers on SAVE will have 90 days from July 1st to switch to a new plan before they’re automatically placed on the standard fixed-payment plan. Borrowers on PAYE or ICR will be able to stay on those plans until 2028, when they’re phased out, but other borrowers may have difficulty switching to PAYE if they haven’t done so before July 1st. IBR will remain available in a slightly updated form indefinitely, but only to borrowers who took out their loans before July 1. RAP will be available to all borrowers at the same time and will be the only IDR plan available to borrowers with new loans. It will also be the only plan for new borrowers that qualifies for PSLF, as the fixed-payment plans will no longer qualify.
Besides these enormous changes to student loan repayment, new borrowers will also need to be more conscientious about their borrowing, as new limits take effect on July 1. These limits will largely not impact undergraduate borrowers unless they should enroll in graduate or professional degree programs. All borrowers—including those who already have taken out student loans—will have a lifetime cap on federal student loan borrowing at $257,500. Graduate student loans will be capped annually at $20,500, with an aggregate cap of $100,000, and professional student loans (such as medical school) will be capped annually at $50,000, with an aggregate cap of $200,000.
If you have concerns about how these changes could impact you—especially if you’re currently enrolled in SAVE—get in touch with us soon! We’ll make sure you understand if and how your situation could change and what steps you may need to take to keep your student loans on track.
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