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Student Loan Repayment Rules Change July 1 Under Federal Law
Borrowers must select new repayment plans by October as the SAVE plan ends and two replacement plans take effect. Parent PLUS and graduate loan limits also tighten under the One, Big, Beautiful Bill Act.
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Federal student loan borrowers will face new repayment options and borrowing limits beginning July 1 under the One, Big, Beautiful Bill Act. The SAVE plan will end, and borrowers currently enrolled in it will receive notices to switch plans within 90 days. Those who do not select a new plan will be placed in the standard repayment plan.
New repayment options Two plans replace earlier options: the Tiered Standard repayment plan and the Repayment Assistance Plan. The Tiered Standard plan sets fixed monthly payments over 10 to 25 years. The Repayment Assistance Plan bases payments on income and number of dependents, with a $10 monthly minimum for low-income borrowers.
Both the Income-Contingent Repayment plan and the Pay As You Earn plan will be phased out by July 1, 2028.
and graduate loan limits New Parent PLUS loans issued after July 1 must be repaid under the Tiered Standard plan. Annual and lifetime caps of $20,000 and $65,000 per dependent now apply. Graduate students will face annual and lifetime limits of $20,500 and $100,000 for unsubsidized loans, with higher caps for professional programs such as pharmacy, dentistry, and law.
Borrowers are advised to review their options through Federal Student Aid resources.
