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Student loan changes underway: What you need to know
- The CONNECT Network
- Jul 2
- 2 min read
Key changes
The SAVE repayment plan is ending. Borrowers enrolled in the Biden-era Saving on a Valuable Education (SAVE) plan will receive notices to transition to another repayment option. Many will have at least 90 days to select a new plan after being notified.
Repayment choices are being simplified. New borrowers will generally have access to two primary options:
A Repayment Assistance Plan (RAP) based on income.
A revised standard/tiered repayment plan with payments based on loan balance.
Graduate and Parent PLUS borrowing is more limited. The overhaul eliminates new Graduate PLUS loans and places stricter caps on graduate and Parent PLUS borrowing.
What current borrowers should do
If you already have federal student loans:
Watch for communications from the U.S. Department of Education about your repayment status.
Review which repayment plans you're eligible for before any transition deadline.
Compare projected monthly payments under available plans to determine which best fits your finances.
Why it's significant
Supporters of the overhaul say it simplifies a complex loan system and limits federal borrowing. Critics argue some borrowers—particularly lower-income households and graduate students—could face higher monthly payments or reduced access to affordable financing. Several aspects of the changes are also the subject of ongoing legal challenges.
Bottom line
Beginning July 1, the federal student loan system has undergone one of its most significant restructurings in decades. Millions of borrowers may need to choose new repayment plans, while future students will encounter stricter borrowing limits and fewer repayment options. Borrowers should carefully review notices from the Department of Education and evaluate their repayment choices as implementation continues.
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