The federal student loan program is undergoing an extensive overhaul, and many of the biggest changes are set to take effect on July 1, 2026.
Millions of borrowers will be impacted. Many will be required to switch repayment plans, likely resulting in new monthly payment amounts and an adjusted forgiveness timeline. New borrowers will face loan limits that didn’t exist previously, forcing some to seek private loans to fill funding gaps. Those with existing loans who are also seeking to borrow again will need to navigate several financial land mines lurking in the new laws.
If you have existing federal student loans or are planning to borrow this year, now is the time to get caught up on all the changes to determine which may affect you. In some cases, making the wrong decision — or failing to act at all — could be costly.
This checklist can help you stay on top of the changes.
[Read: Best Private Student Loans.]
If You Have Existing Student Loans
Nearly 43 million Americans have student loans, and many will be impacted by the changes. For example, about 10 million borrowers on income-driven repayment plans will need to transition to new plans within the next two years.
Borrowers on a standard repayment plan are less likely to be affected, but some may lose potential benefits or could be at risk of forfeiting repayment options.
Here’s what each type of borrower should do as changes take effect.
All Borrowers: Check Your Plan
Student loan experts advise all borrowers to log on to studentaid.gov and confirm which type of repayment plan you’re in. This will help you determine what actions you may need to take moving forward.
While you’re there, check that the address and contact information on file are current. Your student loan servicer will reach out to you if action is required, and outdated contact information could cause you to miss important communications, such as the SAVE plan notice we’re about to discuss.
Borrowers on SAVE Plan: 90-Day Window to Switch
The most popular and affordable income-driven repayment plan met its end in March when a court approved a settlement agreement. Now, more than 7 million people who were on the Saving on A Valuable Education plan will be given a 90-day window to switch to a new plan.
If you’re still in the SAVE plan, you can expect to receive a notice from your loan servicer after July 1 outlining steps to select a new plan. That notice will start a 90-day clock for you to switch. One key point to note: These notices will be sent out gradually to avoid overwhelming servicers.
“Not everyone’s going to get the notice at the same time,” says Scott Buchanan, executive director of the Student Loan Servicing Alliance, a nonprofit trade association whose members service the majority of federal and private loans. “I think that will create a little bit of confusion for people. You may have spouses who get a letter from their servicer on July 1 and their spouse doesn’t get the letter until 30 days later, and each will have their own 90-day window. That’s by design to try to minimize the stress on the system of all these borrowers calling into their servicer all at once.”
SAVE borrowers will have multiple repayment options to choose from, including legacy repayment plans IBR, ICR and PAYE as well as the new Repayment Assistance Plan, or RAP, that the Trump administration is launching July 1. In most cases, borrowers will see monthly payments increase in their new plan. Here’s a closer look at the how the legacy plans compare with RAP.
If you don’t select a new repayment plan, you’ll automatically be transitioned to the standard plan, which will likely result in significantly higher monthly payments. You can still switch plans after the deadline, but you’ll probably have to make at least one payment at the standard rate.
If you’re on the SAVE plan, you likely haven’t made a payment in almost two years, since payments were paused as legal challenges played out. Experts suggest you use the 90-day window to adjust your budget to make room for your new estimated student loan bill before your payments restart.
Borrowers on ICR or PAYE Plans: Two-Year Countdown Begins
If you’re one of the nearly 3 million borrowers on either an income-contingent repayment, or ICR, plan or Pay As You Earn, or PAYE, plan, the good news is you don’t have to do anything right now. The bad news? Your clock is ticking, too.
Both of these repayment plans will be phased out in July 2028, so it may be a good time to start calculating which replacement plan — RAP or income-based repayment — will be a better fit for you.
There are several points to keep in mind when comparing the two. Experts say borrowers with incomes below $80,000 can generally expect lower monthly payments in RAP than in IBR, while the opposite is true for those with higher incomes. Borrowers pursuing time-based forgiveness may want to opt for IBR, which cancels your loan balance after 20 or 25 years. Loan balances in RAP aren’t forgiven until you’ve made 30 years of payments.
Borrowers on IBR Plan: Crunch the Numbers
IBR will live on with no phaseout date, although new borrowers won’t have access to it after July 1, 2026. That means existing borrowers can still remain on the plan or switch into it.
It may be worthwhile to look at your monthly payments and the overall cost of your loan in the IBR plan vs. the new RAP option.
Parent PLUS Borrowers: Did You Lose Potential Benefits?
In past years, parents who took out PLUS loans to fund their student’s education could access more affordable income-driven repayment plans (and forgiveness) by consolidating their loans. That popular loophole closes on July 1, meaning parents who haven’t consolidated have lost that benefit. (Even if you’re reading this before July 1, it’s likely too late to get a consolidation application processed.)
So that leaves two checklist items for Parent PLUS borrowers. First, those who did consolidate their loans before the deadline must enroll in an ICR plan before July 1, 2028, if they haven’t already. After that, they can transition into other income-driven options.
Second, parents who didn’t consolidate may want to take a closer look at whether they could save money by refinancing their student loans with a private lender, since they won’t be forfeiting as many benefits and protections as they might have in the past.
[Read: Best Student Loan Refinance Lenders.]
All Borrowers: Beware of Taking Out New Loans
If you have existing loans and are planning to take out new federal loans for another degree after July 1, you’ll end up losing access to your current repayment plan.
For example, say you have $20,000 in undergraduate loans on an IBR repayment plan, then take out another $20,000 in new loans for a master’s degree this year. By taking out the new loan, you automatically bump your old loan off the IBR plan. You’re left with only two repayment options — RAP or standard plan — for all $40,000.
Those approaching forgiveness should be particularly wary of this situation, because a new loan could tack on five or 10 years of payments to your existing loans before they’re canceled.
Parents who consolidated to gain access to affordable repayment plans are also at risk. For example, if a parent who has existing loans in an income-driven plan takes out a new loan for a second child, the parent would forfeit the income-driven plan entirely, without any avenue to regain access.
If You’re a Graduate Student
Changes impacting new borrowers are slightly more straightforward, but they’re also significant. Graduate students and parents could previously borrow up to the cost of attendance, but both now face limits on how much they can borrow annually and overall. (Note that borrowers who’ve already taken out loans for a degree they’re currently pursuing won’t face caps as they complete their degree.)
Determine Your Caps and Calculate Gaps
If you’re entering graduate school, the amount you can borrow from the federal government is determined by the type of degree you’re pursuing. Here’s how it breaks down:
| Annual Limit | Aggregate Limit | Degrees Included | |
| Professional Degree | $50,000 | $200,000 | Pharmacy, dentistry, veterinary medicine, chiropractic, law, medicine, optometry, osteopathic medicine, podiatry, theology, clinical psychology |
| Graduate Degree | $20,500 | $100,000 | All other degrees |
The first order of business for incoming grad students is to figure out which caps apply to you based on your degree.
Once you’ve determined how much you can borrow each year and in total, calculate how much extra funding you’ll need. If you expect you’ll surpass the federal limits, start reaching out to private lenders to see if you’ll qualify for a loan and what rate you might get.
Shop for Private Loans if Needed (and Find a Cosigner)
Researchers estimate that roughly 40% of borrowers who will need private loans won’t qualify for them. If you don’t have a strong credit score or debt-to-income ratio, it might pay off to find a relative or friend willing to cosign your loan. Lenders say students with creditworthy cosigners tend to get the best rates on private loans.
[Read: Best Parent Student Loans: Parent PLUS and Private.]
If You’re a Parent Borrower
Know Your Limits
If you’re planning to take out federal loans to help your student pay for college, you’ll want to familiarize yourself with the new borrowing ceiling you’ll face. Parents are now limited to $20,000 annually and $65,000 total for each dependent. The overall limit could present a situation where you may hit a funding wall as your student enters their later college years
.
Experts say families should map out how they expect to pay for a student’s full college attendance rather than taking it year by year. In some cases, it may be beneficial to spread out savings or 529 plan money through all four years to evenly supplement federal loans and potentially avoid the need for private loans.
If you have existing federal loans on an affordable repayment plan, and you don’t want to lose access to that plan by taking out a new Parent PLUS loan, experts say one strategy you could use is to put the new loan in your partner’s name if possible.
Shop and Compare Private Student Loan Rates
Even if you don’t expect to exceed borrowing caps, it may still be worth seeing what rates you might get from private lenders. Parent PLUS loans don’t offer the same protections they once did, and the federal student loan rate in 2026-27 for parents is 9.07%, near its highest mark in more than a decade. Some of the best private student lenders offer low-end rates below 4%.
More from U.S. News
Why Parents Could See a Big Jump in Student Loan Payments
Is Now a Good Time to Refinance Your Student Loans?
How Many People Take Out Variable-Rate Student Loans? (Answer: Very Few)
Federal Student Loan Changes Are Almost Here. Here’s Every Step You Should Take After July 1 originally appeared on usnews.com
