On July 1, a host of new student loan changes from the One Big Beautiful Bill Act will come into effect, including the end of the Biden-era SAVE repayment plan and the introduction of two Republican-designed repayment plans with strict new borrowing limits for some students. Navigating these changes can be daunting, but this article aims to provide clarity for various borrower scenarios. For those enrolled in the SAVE plan, the transition to new repayment plans may exacerbate rising student loan defaults. Current borrowers with pre-July 1 loans and no new loan plans have options like the Standard, Graduated, and Extended Repayment Plans, each with its own advantages and disadvantages. Income-driven repayment plans, such as IBR, ICR, PAYE, and RAP, offer loan forgiveness but come with long repayment terms. New undergraduate and graduate borrowers face limited options, primarily the RAP and Tiered Standard Plans, with lending limits for graduate students decreasing significantly. Short-term job training programs may now qualify for Pell Grants, and Public Service Loan Forgiveness (PSLF) remains available, despite potential changes to its rules. Parents seeking to help their students with Parent PLUS loans face new borrowing limits and repayment plan restrictions. This article provides a comprehensive guide to these changes, offering insights and commentary on the implications for borrowers.
