Millions of Americans with federal student loans will see significant changes beginning today as a sweeping overhaul of the student loan system takes effect. The new rules affect both future borrowers and many current borrowers by changing borrowing limits, repayment options, and loan eligibility.
The changes impact an estimated 43 million Americans with federal student loan debt and stem from federal legislation enacted in 2025.
Among the most significant changes is the phaseout of the Biden administration’s Saving on a Valuable Education (SAVE) repayment plan. Borrowers currently enrolled in SAVE will have 90 days to select a new repayment option or be automatically transitioned to another eligible plan.
New borrowers will generally have two repayment choices: a standard repayment plan with repayment periods based on the amount borrowed, or the new Repayment Assistance Plan (RAP), which bases monthly payments on a borrower’s adjusted gross income and provides loan forgiveness after 30 years of qualifying payments. Borrowers who enroll in automatic payments will receive a temporary 1% interest rate reduction.
The overhaul also places new limits on federal borrowing.
Graduate students are now subject to a lifetime federal loan limit of $100,000, while students in designated professional degree programs, such as law and medicine, may borrow up to $200,000 over their lifetime. Parent PLUS loans are now capped at $20,000 per year per child, with a lifetime limit of $65,000 per student.
Several provisions of the overhaul remain the subject of ongoing legal challenges. A federal court has blocked implementation of a revised definition affecting eligibility for the Public Service Loan Forgiveness program, while litigation continues over other aspects of the new rules.
Education experts say the changes could increase reliance on private student loans for families who reach the new federal borrowing limits, while supporters argue the reforms are intended to simplify repayment options and limit federal lending. The long-term effects on college affordability and student borrowing will become clearer as the new system is implemented.
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