Key facts
- New student loan repayment plans, Repayment Assistance Plan (RAP) and a tiered standard repayment plan, will be implemented on July 1.
- The SAVE plan is being eliminated, requiring 7 million enrolled borrowers to transition to a new plan.
- New lifetime borrowing caps will be implemented: $100,000 for graduate students and $200,000 for professional students.
- The Parent PLUS program will have a new cap of $65,000 per child.
- Borrower advocates and Democratic lawmakers express concerns about increased monthly payments and potential shifts to private loans.
The Trump administration's student loan repayment overhaul, part of broader spending legislation, is set to take effect on July 1. These changes aim to simplify the federal student loan system and address concerns about rising tuition costs and excessive borrowing. However, the reforms have drawn criticism from borrower advocates and Democratic lawmakers who fear they will lead to higher monthly payments for millions and potentially push borrowers towards more expensive private loan options.